Question

What will be the difference between the
compound interest and the simple interest earned
on a sum of Rs. 1055 at the rate of 16 pcpa at the
end of two years?
(a) Rs. 47
(b) Rs. 67
(c) Rs. 27
(d) Rs. 57
(e) Rs. 37​

Answer 1

Answer:

(d) Rs. 67

Step-by-step explanation:

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Answer 2

The correct answer is option (c) Rs. 27

Given:

The principal amount P = Rs 1055

Rate of interest  R = 16%

Time period T = 2 years

To find:

The difference between the compound interest and the simple interest earned on a sum of Rs. 1055 at the rate of 16 pcpa at the end of two years

Solution:

Simple interest on the sum

Here, P = Rs 1055 at R = 16% for T = 2 years  

As we know Simple interest I = (PTR)/100

⇒ Simple interest gained = (1055)(2)(16)/100 = 337.6 Rs

Simple interest = 337.6 Rs  

Compound interest on sum

As we know Compound interest = P (1 + r/100)^t - P

⇒ Compound interest = 1055 (1 + 16/100)²- 1055

= 1055(116/100)² - 1055

= 1055(1.3456) - 1055

= 1419.60 - 1055 = 364.60

Compound interest on sum = 364.608

The difference between Compound interest and Simple interest earned

= 364.60 - 337.6 = 27  

The difference between Compound interest and Simple interest earned on sum of Rs.1055 is 27  

The correct answer is option (c) Rs. 27

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