Multiple choice

The difference between the simple interest and the compound interest (compounded annually) on Rs 2000 for 2 years at 8% per annum will be

  1. Rs 10

  2. Rs 20

  3. Rs 13

  4. Rs 25
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Simple interest for 2 years = 2000 * 0.08 * 2 = 320. Compound interest = 2000 * (1.08^2 - 1) = 2000 * 0.1664 = 332.8. Difference = 332.8 - 320 = 12.8, which rounds to 13.

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