Multiple choice

What will be the difference between the simple interest and compound interest compounded annually at the rate of 12% per annum on Rs. 5000 for two years?

  1. Rs. 47.50

  2. Rs. 72

  3. Rs. 70

  4. Rs. 128

  5. Rs. 63
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Compound interest (C.I.)=Amount-Principal Simple interest(S.I.)=Principal*Time*Rate%/100. Required difference is (5000(1+(12/100)2-5000)-(5000*12*2/100) =5000((28/25)*(28/25) -1)-1200 =5000((784-625)/625)-1200 = Rs. 72
It is the correct answer.

Keep practicing — related questions