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

Answer 1

The correct option is A

Rs. 64.10

Given, P = Rs.1000, R$=10\%$, T = 4 yrs

$S.I=\frac{P\times R\times T}{100}=\frac{1000\times 10\times 4}{100}=\text{₹}400$
$A=P{(1+\frac{R}{100})}^n=1000{(1+\frac{10}{100})}^4$
$\Rightarrow 1000{\left(\frac{11}{10}\right)}^4=1000\times \frac{11\times 11\times 11\times 11}{10\times 10\times 10\times 10}=1464.1$
$C.I.=A-P=1464.1-1000$ = $₹464.1$
$\therefore C.I.-S.I.=464.10-400$ = $₹64.10$