Multiple choice

The difference between the compound and simple rates of interest on Rs. 10,000 for 3 years at 5% p.a. is

  1. Rs. 76.50

  2. Rs. 76.00

  3. Rs. 76.25

  4. Rs. 76.75
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The difference between compound interest and simple interest for 3 years is given by the formula D = P * (r/100)^2 * (3 + r/100). Plugging in P = 10,000 and r = 5, we get D = 10,000 * (0.05)^2 * (3.05) = 10,000 * 0.0025 * 3.05 = 25 * 3.05 = 76.25.

AI explanation

The simple interest is calculated as 10000 * 5 * 3 / 100 = Rs. 1500. The compound interest is calculated as 10000 * (1 + 5/100)^3 - 10000 = Rs. 1576.25. The difference between the compound interest and the simple interest is 1576.25 - 1500 = Rs. 76.25.

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