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Question

What will be the difference between simple and compound interests at the rate of 10% per annum on a sum of 1000 after 4 years?

A
64.10
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B
.40.40
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C
32.10
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D
31
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Solution

The correct option is A 64.10
Given: Principal, P = 1000, rate of interest, r =10% and time, t = 4 years

Simple interest, S.I = P×r×t100=1000×10×4100= 400

The amount at the end of n years when compounded annually,

A=P(1+R100)n=1000(1+10100)4=1000(1110)4=1000×11×11×11×1110×10×10×10= 1464.1

Compund interest, C.I. = A - P = (1464.11000)= 464.1

C.I.S.I.= 64.10

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