What will be the Difference between C.I and S.I? If

The difference between the compound interest and simple interest on Rs.8000 at 5% p.a for 3 years is:

  1. Rs.50
  2. Rs.60
  3. Rs.61
  4. Rs.600
vijay Professor Asked on 2nd August 2015 in Maths.
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1 Answer(s)

Answer: (3) Rs.61
Explanation:-
Given-
Principal = Rs.8000, Rate = 5 %, Time = 3 years
Formula-
Simple Interest = P x R x T/100
Where, P = principal , R = rate, & T = time.
Then, the Simple Interest = 8000 x 5 x 3/100
= 80 x 5 x 3
= Rs.1200
Formula-
Compound Interest = P [(1 + R/100)t – 1]
Where, P = principal, R = rate, t = time.
Then, Compound Interest = 8000[(1 + 5/100)^3 – 1]
=8000 x (21/20)^3 – 8000
= 8000 x 21 x 21 x 21 /20 x 20 x 20 – 8000
= 9261 – 8000
= Rs.1261
The difference between the compound interest and simple interest = 1261 – 1200
= Rs.61
Hence, the answer is (3) Rs.61.

Anurag Mishra Professor Answered on 2nd August 2015.
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