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The difference between compound interest and simple interest on Rs 8000 at 5% P.a for 3 years is_________?

Correct answer: C. Rs 61

  • A. Rs 50
  • B. Rs 60
  • C. Rs 61
  • D. Rs 600

Explanation

The simple interest is 8,000 Rs x 5% x 3 = 1,200 Rs. The compound interest is 8,000 Rs x [(1.05)^3 - 1] = 1,261 Rs, so the difference is 1,261 Rs - 1,200 Rs = 61 Rs. Students may choose 60 Rs by using a rough estimate instead of the exact compound amount.

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