Question

What will be the difference between simple and compound interest at the rate of $10$% per annum on a sum of Rs. $1,000$ after $4$ years?

• A. Rs. $31$
• B. Rs. $32.10$
• C. Rs. $40.40$
• D. Rs. $64.10$

Answer 1

Answer: (D)

Rs. $64.10$

Given, $P=$ Rs. $1000$, time $=4$ years, rate $=10\%$

S.I. $=\frac{\text{PRT}}{100}$

$\Rightarrow \frac{1000\times 10\times 4}{100}=$ Rs. $400$

C.I for $4$ years:-

$A=P{(1+\frac{R}{100})}^T$

$\Rightarrow 1000{(1+\frac{10}{100})}^4$

$\Rightarrow 1000\times \frac{11}{10}\times \frac{11}{10}\times \frac{11}{10}\times \frac{11}{10}$

$\Rightarrow 1464.1$

C.I. $=1464.1-1000=464.1$

Difference between C.I and S.I

$\text{Difference}=464.1-400=$ Rs. $64.10$