Multiple choice

What will be the difference between simple and compound interest @ $10\%$ per on annum on a sum of Rs.$1000$ after $4$ years?

  1. Rs. $31$
  2. Rs. $32. 10$
  3. Rs. $64. 10$

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

The simple interest for 4 years is Rs. 400. The compound interest is 1000(1.1^4 - 1) = Rs. 464.10, so the difference is Rs. 64.10.

AI explanation

Using the formula for the difference between compound and simple interest for 4 years, the difference equals Principal multiplied by the rate cubed, divided by 100 cubed, all multiplied by (100 + Rate) / 100, plus Principal multiplied by the rate squared divided by 100 squared. Substituting the values gives (1000 x 0.001 x 1.1) + (1000 x 0.01), resulting in 1.10 + 10, which equals Rs. 64.10.

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