Compound Interest Practice Test 1

Question : 37 of 40

Marks: +1, -0

For obtaining the difference between compound and simple interest on a certain sum of money invested for 3 years at 5% p.a., we must multiply the sum of money by :

0.007625
0.007645
0.008625
0.007525

Validate

Solution:

Let difference between compound and simple interest be Rs. x; then,

P[(1+5/100)^3-1]-{P×5×3}/100=x

⇒P×1261/8000-{3P}/20=x

⇒x=0.007625P

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