What will be the difference between the simple interest and compound interest earned on a sum of ₹ 985 @ 14% p.a at the end of 2 years? 18.21814.21419.30616.408
Question
What will be the difference between the simple interest and compound interest earned on a sum of ₹ 985 @ 14% p.a at the end of 2 years? 18.21814.21419.30616.408
Solution
To find the difference between simple interest and compound interest, we first need to calculate both.
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Simple Interest (SI) is calculated using the formula: SI = (P * R * T) / 100 Where P is the principal amount (₹ 985), R is the rate of interest (14% p.a), and T is the time period (2 years). So, SI = (985 * 14 * 2) / 100 = ₹ 275.8
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Compound Interest (CI) is calculated using the formula: CI = P * (1 + R/100)^T - P So, CI = 985 * (1 + 14/100)^2 - 985 = ₹ 291.06 (approximately)
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The difference between CI and SI is: CI - SI = 291.06 - 275.8 = ₹ 15.26
So, none of the options provided (18.218, 14.214, 19.306, 16.408) match the calculated difference. There might be a mistake in the question or the options provided.
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