Multiple choice

The difference in compound interest and simple interest for one year for Rs. $1,000$ at $10\%$ p.a. is?

  1. $10$
  2. $5$
  3. $0$

  4. None of the above
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

For a period of one year, simple interest and compound interest are identical because interest is only calculated on the principal once. Therefore, the difference between them is 0.

AI explanation

For any sum of money, simple interest and compound interest are always equal for a period of one year. Using the formulas for simple interest and compound interest, the interest is calculated as 10% of Rs. 1000, which equals Rs. 100. Therefore, the difference between the two interests is Rs. 100 - Rs. 100 = Rs. 0.

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