ECONOMICS
COMPOUND INTEREST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The difference between simple and compound interests compounded annually on a certain sum of money for 2 years at 4% per annum is Re. 1. The sum (in Rs.) is:
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625
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725
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6250
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7250
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Explanation:
Detailed explanation-1: -The difference between the compounded annually and the simple interest on a certain sum for 2 years at 4% per annum is Rs. 20.
Detailed explanation-2: -The difference between simple and compound interests compounded annually on a certain sum of money for 2 years at 5% per annum is Rs. 100.
Detailed explanation-3: -Simple interest is based on the principal amount of a loan or deposit. In contrast, compound interest is based on the principal amount and the interest that accumulates on it in every period.
Detailed explanation-4: -Expert-Verified Answer the difference between simple interest and compound interest on a certain sum of money at 20% per annum for 2 years is 48.
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