Question

What will be the difference between simple and compound interest at the rate of $10$% per annum on a sum of Rs. $10,000$ after $4$ years?

• A. Rs. $310$
• B. Rs. $321$
• C. Rs. $640$
• D. Rs. $641$

Answer 1

The correct option is D Rs. $641$

$\Rightarrow$ Here we have, $P=.$Rs. $10,000,R=10\%$ and $T=4$ years.

$\Rightarrow$ $S.I.=\frac{P\times R\times T}{100}=\frac{10000\times 10\times 4}{100}$

$\Rightarrow$ $S.I.=$ Rs. $4000$

$\Rightarrow$ $C.I.=P\times (1+\frac{R}{100}{)}^T-P$

$\Rightarrow$ $C.I.=10000\times (1+\frac{10}{100}{)}^4-10000$

$\Rightarrow$ $C.I.=14641-10000=.$ Rs. $4641.$

$\therefore$ $C.I.-S.I.=$Rs.$4641-$Rs.$4000=Rs.641.$