Multiple choice

The difference between compound interest and simple interest on a sum of Rs. 4000 for 2 years at 5% p.a. payable yearly is -

  1. Rs. 12.5

  2. Rs. 15

  3. Rs. 20

  4. Rs. 25

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

Simple interest = P*r*t = 4000*0.05*2 = Rs. 400. Compound interest = 4000*(1.05)^2 - 4000 = Rs. 410. Difference = Rs. 10. Since Rs. 10 is not in options A-D, 'None of these' is correct.

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