Multiple choice

The difference between the compound interest and simple interest on a sum of Rs. 4000 for 3 years at 5% per annum is-

  1. Rs. 48.50

  2. Rs. 45.50

  3. Rs. 30.50

  4. Rs. 35.40

  5. None of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Principal = 4000, time = 3 years, rate = 5%. Simple Interest = PRT/100 = 4000×5×3/100 = 600. Compound Interest = P[(1+R/100)^T - 1] = 4000[(1.05)³ - 1] = 4000[1.157625 - 1] = 4000×0.157625 = 630.50. Difference = 630.50 - 600 = 30.50.

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