Question

Find the difference between the compound interest and simple interest when a sum of Rs.15,625 is invested for 2 years at 4% per annum.

• A. 25
• B. 50
• C. 12.5
• D. 20

Answer 1

Answer:

A. 25

Given:

P = 15625

N = 2years

R =4%

Calculation:

Difference between SI and CI for 2years is.,

$D=P\times{[\frac{R}{100}}]^2$

D = Difference

$D = 15625\times[{\frac{4}{100}}]^2$

$D=15625\times{\frac{4}{100}}\times{\frac{4}{100}}$

$D=\frac{15625}{25\times{25}}$

$D=25$