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Railways PYQCBT 2 2017

RRB NTPC · Question 27

The simple interest at 10% p.a. on a deposit for 2 years is Rs. 4,000. If the interest is compounded on an annual basis, how much more will be the amount of interest?

  1. Rs. 200

  2. Rs. 240

  3. Rs. 220

  4. Rs. 190

Show answer & explanation

Answer: (A) Rs. 200

Explanation

SI for 2 years at 10% is 4000, so P = 4000/(0.10 × 2) = Rs 20,000. CI = 20000 × (1.1² − 1) = 20000 × 0.21 = Rs 4,200, which is Rs 200 more.