Question

What will be the difference between simple and compound interest on Rs. 8.000 at the rate of 5 percent per annum at the end of 3 years?

• A. Rs. 61.00
• B. Rs. 122.00
• C. Rs. 91.50
• D. Rs. 152.50

Answer 1

The correct option is A Rs. 61.00

$P=Rs$ $8000$

$R=5$%

$T=3$ years.

$S.I=\frac{PTR}{100}$

$=\frac{8000\times 3\times 5}{100}$

$=1200$.

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

$=8000{(1+\frac{5}{100})}^3-8000$

$=9261-8000$

$=1261$.

$\therefore$ Difference between C.I and S.I

$=Rs$ $(1261-1200)$

$=Rs$ $61$