Multiple choice

Sanjay took two loans for Rs.2500 each for 2 years at 10% Simple Interest and 10% Compound Interest per annum respectively. Calculate the difference (in Rs.) between the Compound Interest and Simple Interest.

  1. 50

  2. 100

  3. 25

  4. 35
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

For Principal = Rs. 2500, rate = 10%, time = 2 years: Simple Interest = 2500 × 0.10 × 2 = Rs. 500. Compound Interest: Year 1 interest = Rs. 250 (new amount = Rs. 2750), Year 2 interest = 2750 × 0.10 = Rs. 275. Total CI = Rs. 525. The difference CI - SI = 525 - 500 = Rs. 25.

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