Multiple choice

The difference between compound interest and simple interest on Rs. 500 for 2 years at 10% per annum is:

  1. Rs. 10

  2. Rs. 5

  3. Rs. 12

  4. Rs. 15
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Difference = P * (r/100)^2 = 500 * (10/100)^2 = 500 * 0.01 = 5.

AI explanation

The formula for the difference between compound interest and simple interest for two years is Principal x (Rate/100) squared. Substituting the given values, we calculate 500 x (10/100) squared, which equals 500 x 0.01. The difference is Rs. 5.

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