RRB NTPC · Question 56
On a certain principal, simple interest obtained is Rs. 2,000 in two years at the rate of 10% p.a. What will be the difference in the amount of interest if the same is compounded on annual basis? A. Rs 200 B. Rs 220 C. Rs 100 D. Rs 120
Show answer & explanation
Answer: (A) C
Explanation
SI for 2 years at 10% is Rs 2,000, so P × 10 × 2/100 = 2000 and P = Rs 10,000. CI for 2 years = 10000 × (1.1² − 1) = 10000 × 0.21 = Rs 2,100. The difference = 2100 − 2000 = Rs 100 (shortcut: P × (r/100)² = 10000 × 0.01 = 100).