Multiple choice

What is the difference (in Rs.) between the compound interest (compounded annually) and simple interest for 3 years on a principal of Rs. 2,500 at the rate of 30% per annum?

  1. 742.5

  2. 624.5

  3. 714.5

  4. 825.25
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A Correct answer
Explanation

CI - SI for 3 years = P * (r/100)^2 * (3 + r/100). P = 2500, r = 30%. CI - SI = 2500 * (0.3)^2 * (3 + 0.3) = 2500 * 0.09 * 3.3 = 225 * 3.3 = 742.5.

AI explanation

Use the standard formula for the difference between compound interest and simple interest for three years: Difference = Principal * (R^2 / 100^2) * (3 + R/100). Plugging in the given values results in Difference = 2500 * (30^2 / 100^2) * (3 + 30/100). This simplifies to Difference = 2500 * (900 / 10000) * 3.3 = 2500 * 0.09 * 3.3 = Rs. 742.50.

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