Multiple choice

The difference between compound interest and simple interest on a certain sum of money at 12% p.a. for two years is Rs. 90. The difference between both the interests after 3 years is

  1. Rs. 100.80

  2. Rs. 180.80

  3. Rs. 280.80

  4. Rs. 270
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

For 2 years, CI - SI = P(r/100)^2. So 90 = P(0.12)^2, P = 90 / 0.0144 = 6250. For 3 years, CI - SI = P(r/100)^2 * (3 + r/100) = 90 * (3 + 0.12) = 90 * 3.12 = 280.8.

AI explanation

The formula for the difference between compound interest and simple interest for two years is P(R/100)^2, so substituting the given values gives 90 = P(0.12)^2, which makes the principal Rs. 6250. For three years, the difference is calculated as P(R/100)^2 times (3 + R/100). Plugging in the values gives 6250 times 0.0144 times 3.12, which equals Rs. 280.80.

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