Q77
ArithmeticSimple & Compound Interest
The difference between simple interest and compound interest on ₹ 1,200 for one year at 10% per annum reckoned half-yearly is
- a.₹ 2·50
- b.₹ 3
- c.₹ 3·75
- d.₹ 4
Answer: (B) ₹ 3
Simple interest for one year = ₹ 120. Compounded half-yearly at 5% per half-year, the amount is 1200 × 1·05 × 1·05 = ₹ 1,323, so the compound interest is ₹ 123. The difference is ₹ 3; it equals the interest on the first half-year's ₹ 60 interest (5% of 60).