Multiple choice

What is the difference between the interests earned, when Rs. 100 was deposited under a recurring deposit scheme for three years at 8% p.a. and Rs. 3,600 under simple interest scheme at the same rate of interest for the same period?

  1. Rs. 864

  2. Rs. 444

  3. Rs. 420

  4. Rs. 1,308

  5. Rs. 24
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Recurring deposit interest: P = 100, n = 36 months, r = 8%. Interest = P * (n(n+1)/2400) * r = 100 * (36*37/2400) * 8 = 444. Simple interest: P = 3600, t = 3, r = 8%. Interest = (3600 * 8 * 3) / 100 = 864. Difference = 864 - 444 = 420.

AI explanation

Using the recurring deposit interest formula where interest equals P multiplied by n multiplied by (n plus 1) multiplied by r divided by 2400, the interest is 100 multiplied by 36 multiplied by 37 multiplied by 8 divided by 2400, equaling Rs. 444. The simple interest on Rs. 3600 for 3 years at 8 percent is calculated as 3600 multiplied by 8 multiplied by 3 divided by 100, giving Rs. 864. The difference between these interests is 864 minus 444, which equals Rs. 420. The difference is Rs. 420.

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