# ECONOMICS (CBSE/UGC NET)

## ECONOMICS

### COMPOUND INTEREST

 Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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:
 A 625 B 725 C 6250 D 7250
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.

There is 1 question to complete.