Multiple choice

A man deposited Rs. $6000$ in a bank at $5\%$ simple interest. Another man deposited Rs. $5000$ at $8\%$ compound interest. After $2$ years, the difference of their interest will be

  1. Rs. $230$
  2. Rs. $232$
  3. Rs. $600$
  4. Rs. $832$
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Simple interest for the first man is (6000 * 5 * 2) / 100 = Rs. 600. Compound interest for the second man is 5000 * ((1 + 8/100)^2 - 1) = 5000 * (1.1664 - 1) = Rs. 832. The difference is 832 - 600 = Rs. 232.

AI explanation

Using the simple interest formula, the first man earns an interest of (6000 x 5 x 2) / 100 = Rs. 600. Using the compound interest formula for the second man, the amount becomes 5000 x (1 + 8/100)^2 = 5000 x 1.1664 = Rs. 5832, making his interest Rs. 832. The difference between their interests is 832 - 600 = Rs. 232.

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