# Find the Different Between Simple and Compound Interest : If

The different between simple and compound interest on a sum of Rs. 2000 for 3 years at 20% p.a.will be:

- Rs. 248
- Rs. 236
- Rs. 256
- Rs. 266

**Answer: (3) Rs.256**

**Explanation:-**

**Given-**

Principal = Rs.2000, Time = 3 years Rate = 20 %

**Formula-**

**Simple Interest = P x R x T/100**

**Where, P = principal , R = rate, & T = time. **Then, Simple Interest = 2000 x 20 x 3/100

= Rs.1200

**Formula-**

**Compound Interest = P [(1 + R/100)**

^{t}– 1]**Where, P = principal, R = rate, t = time.**

Then, C I = 2000[(1 + 20/100)3 – 1]

= 2000[(1 + 1/5)3 – 1]

= 2000 x 6 x 6 x 6/5 x 5 x 5 – 2000

= 16 x 216 – 2000

= 3456 – 2000

= Rs.1456

The different between simple and compound interest = 1456 – 1200

= Rs.256

Hence, the answer is (3) Rs.256.