Multiple choice

Find the difference between the simple interest and the compound interest on $Rs.\ 5000$ for $2$ years at $9\%$ per annum.

  1. $Rs.\ 40.5$
  2. $Rs.\ 18$
  3. $Rs.\ 20$
  4. $None\ of\ these$
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A Correct answer
Explanation

Difference between CI and SI for 2 years = P * (R/100)^2. Difference = 5000 * (9/100)^2 = 5000 * 0.0081 = 40.5.

AI explanation

For two years, the difference between compound interest and simple interest is given by the formula Difference = P × R^2 / 100^2. Substituting the given values, we calculate Difference = 5000 × 9^2 / 10000, which simplifies to 5000 × 81 / 10000. Multiplying these values gives a difference of Rs. 40.5.

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