Multiple choice

What is the difference between the compound interest and simple interest accrued on an amount of Rs. 16200 at the end of 3 year at the rate of 25%?

  1. Rs. 3234.36

  2. Rs. 3420.64

  3. Rs. 3290.63

  4. Rs. 4208.08
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Simple Interest for 3 years at 25% on Rs. 16200: SI = (16200 × 25 × 3)/100 = Rs. 12150. Compound Interest: Year 1: 16200 × 1.25 = 20250; Year 2: 20250 × 1.25 = 25312.5; Year 3: 25312.5 × 1.25 = 31640.63. CI = 31640.63 - 16200 = Rs. 15440.63. Wait - this doesn't match the options. Let me recalculate more carefully: P = 16200, r = 25%, n = 3 years. SI = 16200 × 0.25 × 3 = 12150. CI = 16200 × (1.25)^3 - 16200 = 16200 × 1.953125 - 16200 = 31640.63 - 16200 = 15440.63. CI - SI = 15440.63 - 12150 = 3290.63, which matches option C exactly.

Keep practicing — related questions