The difference between the compound and the simple interest on a sum for 2 years at 10% per annum, when the interest is compounded annually, is Rs.28. If the interest were compounded halfyearly, the difference in the two interests wil be
1). Rs.44
2). Rs.28.35
3). Rs.43.41
4). Rs.43.29
This is the right answer
If the difference between compound
interest and simple interest
at the rate of r% per annum
for 2 years be x, then
Principal = = 2800
If the interest is compounded half
yearly, then
r = 5%
Time = 4 half years
Simple interest = = 560
Compound interest
= 2800 [1.2155 – 1]
= 2800 × 0.2155 = 603.41
Difference = (603.41–560)
= 43.41