What is the difference between the compound interest and simple interest (in ₹, to the nearest integer) on ₹12,000 in 2 years at 8% per annum, compounded annually?
- A77
- B76
- C98
- D97
Solution & Step-by-step Explanation
The formula for the difference between compound interest (CI) and simple interest (SI) for 2 years is given by:
CI−SI=P(
100
R
)
2
Where:
P=₹12,000 (Principal)
R=8% (Rate of interest per annum)
Substituting the values:
CI−SI=12000×(
100
8
)
2
CI−SI=12000×
10000
64
CI−SI=
10
12×64
=
10
768
=76.8
Rounding to the nearest integer, the difference is ₹77.
CI−SI=P(
100
R
)
2
Where:
P=₹12,000 (Principal)
R=8% (Rate of interest per annum)
Substituting the values:
CI−SI=12000×(
100
8
)
2
CI−SI=12000×
10000
64
CI−SI=
10
12×64
=
10
768
=76.8
Rounding to the nearest integer, the difference is ₹77.