2023 · Q41
What is the difference between simple interest and compound interest on Rs. 10,000 for two years at 20% per annum compounded half-yearly?
Elementary MathematicsSimple and Compound Interest
- ARs. 842
- BRs. 756
- CRs. 641
- DRs. 542
Explanation
Simple interest for 2 years at 20% is 10000 × 0.2 × 2 = Rs 4000. Compound interest at 10% per half-year for 4 half-years is 10000(1.1⁴ − 1) = Rs 4641. The difference is Rs 4641 − Rs 4000 = Rs 641 (C).