Question

What will be the difference between simple interest and compound interest at 4% per annum on a sum of Rs 5000 after 3 yr?

• A. Rs 24.32
• B. Rs 28.56
• C. Rs 32.48
• D. Rs 36.18
• E. None of these

Answer 1

The correct option is A Rs 24.32

Difference in rate of interest at 4%
$=(4+4+4+\frac{16+16+16}{100}+\frac{4\times 4\times 4}{(100{)}^2})-3\times 4$
$=\frac{48}{100}+\frac{64}{(100{)}^2}=0.48+0.0064=0.4864\%$
Difference in amount $=\frac{5000\times 0.4864}{100\times 10000}=Rs24.32$