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Question : Find the difference between the simple interest and the compound interest payable annually on a sum of Rs. 6,500 at 7% per annum for 3 years. (Correct to two decimal places.)

Option 1: Rs. 94.34

Option 2: Rs. 97.78

Option 3: Rs. 98.73

Option 4: Rs. 95.67


Team Careers360 20th Jan, 2024
Answer (1)
Team Careers360 21st Jan, 2024

Correct Answer: Rs. 97.78


Solution : Given: Sum of money($P$) = Rs. 6500
Interest rate ($r$) = 7%
Time($t$) = 3 years
Now, the difference of interest for 3 years
= $\frac{Pr^2}{100^2}×(3+\frac{r}{100})$
= $\frac{6500×7^2}{100^2}×(3+\frac{7}{100})$
= $\frac{65×49}{100}×(\frac{307}{100})$
= Rs. 97.78
Hence, the correct answer is Rs. 97.78.

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