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:

  1. Rs. 248
  2. Rs. 236
  3. Rs. 256
  4. Rs. 266
Monis Rasool Professor Asked on 31st July 2015 in Maths.
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1 Answer(s)

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.

Anurag Mishra Professor Answered on 31st July 2015.
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