Multiple choice

Rahul deposited Rs. 7,500 at 4% p.a. for 2 years compounded annually in a bank. Jasmine deposited Rs. 7,500 for simple interest at the rate of 5% p.a. for 2 years. What is the difference between the amount of money they earned at the end of two years?

  1. Rs. 8,250

  2. Rs. 8,112

  3. Rs. 138

  4. Rs. 190

  5. Rs. 128
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Rahul's amount = 7500 * (1.04)^2 = 7500 * 1.0816 = 8112. Jasmine's amount = 7500 + (7500 * 0.05 * 2) = 7500 + 750 = 8250. Difference = 8250 - 8112 = 138.

AI explanation

Rahul's compound interest is 7500 times (1.04 squared minus 1), which is 7500 times 0.0816 = Rs. 612. Jasmine's simple interest is 7500 times 5 times 2 divided by 100, which equals Rs. 750. The difference between their earned interest is 750 minus 612 = Rs. 138.

Keep practicing — related questions