Multiple choice

Amit lent Rs. 40,000 each to 2 persons, one at 30% simple interest and second at 30% compound interest for 3 years. By what percentage is the compound interest greater than the simple interest received by Amit in 3 years?

  1. 23%

  2. 33%

  3. 35.33%

  4. 37.53%

  5. None of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Simple Interest (SI) = P * R * T / 100 = 40000 * 0.3 * 3 = 36000. Compound Interest (CI) = P * ((1 + R/100)^T - 1) = 40000 * ((1.3)^3 - 1) = 40000 * (2.197 - 1) = 40000 * 1.197 = 47880. Difference = 47880 - 36000 = 11880. Percentage = (11880 / 36000) * 100 = 33%.

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