Compound Interest Practice Test 3

Question : 25 of 40

Marks: +1, -0

The difference between CI (Compound Interest) and SI (Simple Interest) on a sum of Rs 4,000 for 2 years at 5% p.a. payable yearly is:

Solution:

P = Rs 4,000; R = 5%; T = 2 year

SI={4000×5×2}/{100}=400

CI=4000(1+5/100)^2-4000

=4000(441/400-1)=410

So, the difference between compound interest and simple interest = 410 - 400 = Rs 10

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