Question 168

What will be the difference in simple and compound interest at the rate of 14% per annum on the sum of Rs. 2,500 after four years ?

Solution

SI = 2500*14*4/100 = Rs 1400

CI = $$2500*(1+14\%)^4$$ - 2500 $$\approx$$ 1.6889 * 2500 -2500 = 1722.25

Hence, difference = 1722.25 - 1400 = 322.25 approximately. The closest option is option C.

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