# 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:

- Rs.50
- Rs.60
- Rs.61
- Rs.600

**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.