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Simple & Compound Interest · Question 51 of 60

Question 51

EasyOriginal question

The simple interest on a sum for 2 years at 8% per annum is ₹1,600. What is the difference between the compound interest (compounded annually) and the simple interest on it for the same time and rate?

Options for question 51

Show the answer and explanation
CorrectNot quiteAnswer B

Correct answer: B

Explanation

  1. One year's SI = ₹1,600 ÷ 2 = ₹800.

  2. The difference is the second year's interest on that ₹800: 8% of ₹800 = ₹64.

Worth noting

₹128 takes 8% of the whole ₹1,600. Only the first year's ₹800 of interest earns interest in the second year.

Concept
CI − SI from the simple interest
Typical time
45 s
Your time
—
The rule this testsDifference between SI and CI
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