Multiple choice

Q and R borrowed Rs.26000 and Rs. 25000 respectively for a period of 2 years Q paid simple interest at the rate of 2% p.a. while R paid compound interest at the same rate compounded annually Who paid more interest and by how much ?

  1. R paid more than Q by Rs.40

  2. R paid more than Q by Rs.30

  3. Q paid more than R by Rs.40

  4. Q paid more than R by Rs.30
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Q interest = 26000 * 0.02 * 2 = 1040. R interest = 25000 * ((1.02)^2 - 1) = 25000 * 0.0404 = 1010. Q paid more by 1040 - 1010 = 30.

AI explanation

Using the simple interest formula, Q pays (26000 * 2 * 2) / 100 = Rs. 1040 in interest. Using the compound interest formula, R pays 25000 * (1 + 2/100)^2 - 25000 = 25000 * 1.0404 - 25000 = Rs. 1010 in interest. The difference is 1040 - 1010 = Rs. 30, meaning Q paid more than R by Rs. 30.

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