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If the simple interest is 10.5% annual and compound interest is 10% annual, find the difference between the interests after 3years on a sum of Rs 1000.
- a)Rs 15
- b)Rs 12
- c)Rs 16
- d)Rs 11
- e)Rs.13
Correct answer is option 'C'. Can you explain this answer?
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If the simple interest is 10.5% annual and compound interest is 10% an...
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If the simple interest is 10.5% annual and compound interest is 10% an...
Given,
Simple interest rate = 10.5% annual
Compound interest rate = 10% annual
Principal amount = Rs 1000
Time period = 3 years
To find the difference between simple and compound interest, we need to calculate both types of interests separately and then find the difference between them.
Calculation of Simple Interest:
Simple interest is calculated using the formula:
SI = (P * R * T) / 100
Where,
P = Principal amount
R = Rate of interest
T = Time period
Here,
P = Rs 1000
R = 10.5% annual
T = 3 years
Substituting the values in the formula, we get
SI = (1000 * 10.5 * 3) / 100 = Rs 315
Calculation of Compound Interest:
Compound interest is calculated using the formula:
CI = P[(1 + R/100)^T - 1]
Where,
P = Principal amount
R = Rate of interest
T = Time period
Here,
P = Rs 1000
R = 10% annual
T = 3 years
Substituting the values in the formula, we get
CI = 1000[(1 + 10/100)^3 - 1] = Rs 331
Difference between Simple Interest and Compound Interest:
The difference between simple interest and compound interest is given by
Difference = CI - SI = Rs (331 - 315) = Rs 16
Hence, the correct answer is option (c) Rs 16.
Simple interest rate = 10.5% annual
Compound interest rate = 10% annual
Principal amount = Rs 1000
Time period = 3 years
To find the difference between simple and compound interest, we need to calculate both types of interests separately and then find the difference between them.
Calculation of Simple Interest:
Simple interest is calculated using the formula:
SI = (P * R * T) / 100
Where,
P = Principal amount
R = Rate of interest
T = Time period
Here,
P = Rs 1000
R = 10.5% annual
T = 3 years
Substituting the values in the formula, we get
SI = (1000 * 10.5 * 3) / 100 = Rs 315
Calculation of Compound Interest:
Compound interest is calculated using the formula:
CI = P[(1 + R/100)^T - 1]
Where,
P = Principal amount
R = Rate of interest
T = Time period
Here,
P = Rs 1000
R = 10% annual
T = 3 years
Substituting the values in the formula, we get
CI = 1000[(1 + 10/100)^3 - 1] = Rs 331
Difference between Simple Interest and Compound Interest:
The difference between simple interest and compound interest is given by
Difference = CI - SI = Rs (331 - 315) = Rs 16
Hence, the correct answer is option (c) Rs 16.
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If the simple interest is 10.5% annual and compound interest is 10% annual, find the difference between the interests after 3years on a sum of Rs 1000.a)Rs 15b)Rs 12c)Rs 16d)Rs 11e)Rs.13Correct answer is option 'C'. Can you explain this answer?
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