Multiple choice

Ross deposited Rs. 7000 in a bank at 5% per annum simple interest and Rashmi deposited Rs. 5000 at 8% per annum compound interest. After 2 years, the difference between their interest money will be

  1. Rs. 162

  2. Rs. 232

  3. Rs. 132

  4. Rs. 164
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Ross: SI = 7000 * 0.05 * 2 = 700. Rashmi: CI = 5000 * (1.08^2 - 1) = 5000 * (1.1664 - 1) = 5000 * 0.1664 = 832. Difference = 832 - 700 = 132.

AI explanation

Ross earns simple interest calculated as (7000 * 5 * 2) / 100 = Rs. 700. Rashmi earns compound interest calculated by finding the total amount using A = P(1 + R/100)^T, which gives 5000(1 + 0.08)^2 = 5000(1.1664) = Rs. 5832. Rashmi's compound interest is the total amount minus the principal, equalling 5832 - 5000 = Rs. 832. The difference between their interests is 832 - 700 = Rs. 132.

Keep practicing — related questions