Question

The difference between simple and compound interest for a sum of Rs. 5,000 lent at 12% per
annum in 2 years is
(A) Rs. 720
(B) Rs. 12
(C) Rs. 72
(D) Rs. 700

Answer 1

answer is option no a .750

Answer 2

Answer:

option (c) is correct

Step-by-step explanation:

Concept:

Compound interest for n years

$=P(1+\frac{r}{100})^n-P$

Simple interest for n years

$=\frac{Pnr}{100}$

Given:

P= Rs.5000

r = 12%

n = 2 years

Compound interest

$=P(1+\frac{r}{100})^n-P\\\\=5000(1+\frac{12}{100})^2-5000\\\\=5000(1+\frac{3}{25})^2-5000\\\\=5000(\frac{28}{25})^2-5000\\\\=5000(\frac{28}{25})(\frac{28}{25})-5000$

=8(28)(28)-5000

=6272 - 5000

=Rs.1272

Simple interest

$=\frac{Pnr}{100}\\\\=\frac{(5000)(2)(12)}{100}$

=(100)(12)

=Rs.1200

C.I - S.I

= 1272 -1200

= Rs. 72.