Multiple choice

On a principal amount of Rs. 20,000, what would be the difference between the compound and the simple interest for the period of 3 years if the rate of interest is 20% p.a.?

  1. Rs. 2,400

  2. Rs. 2,560

  3. Rs. 1,600

  4. Rs. 4,000

  5. Rs. 1,760
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

CI - SI for 3 years = P * (r/100)^2 * (3 + r/100). 20000 * (0.2)^2 * (3.2) = 20000 * 0.04 * 3.2 = 800 * 3.2 = 2560.

AI explanation

For a period of 3 years, the difference between compound and simple interest is calculated using the formula: the principal multiplied by the rate squared, multiplied by (300 plus the rate), all divided by 100 cubed. Plugging in the values, we get 20000 multiplied by 400, multiplied by 320, divided by 1000000. This simplifies to a difference of Rs. 2560.

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