Multiple choice

Direction : Study the following questions carefully and choose the right answer. Rs. 160000 is divided into two equal parts. One part is invested in a scheme which gives 12% interest compounded annually for two years. The other part is invested in a scheme offering simple interest of 13% for 2 years. What is the difference between the interest earned on the two schemes?

  1. Rs. 512

  2. Rs. 426

  3. Rs. 448

  4. Rs. 568

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

Part 1 (CI): 80000 * (1.12^2 - 1) = 80000 * 0.2544 = 20352. Part 2 (SI): 80000 * 0.13 * 2 = 20800. Difference = 20800 - 20352 = 448.

AI explanation

Each part is Rs. 80000, and the simple interest for two years at 13% is calculated as 80000 times 13 times 2 divided by 100, yielding Rs. 20800. The compound interest for two years at 12% is found using the effective percentage formula, which is 12 plus 12 plus 12 times 12 divided by 100, equaling 25.44%, resulting in an interest of 25.44% of 80000, which is Rs. 20352. The difference between the interests is 20800 minus 20352, which equals Rs. 448.

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