1. On a certain sum of money, the simple interest for 2 years is Rs. 350 at the rate of 4% per annum. It was invested at compound interest at the same rate for the same duration as before, how much more interest would be earned ?
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By: anil on 05 May 2019 02.28 am
Rate of interest = 4% and time period = 2 years Let principal sum = Rs. $$x$$ Simple interest = $$frac{P imes R imes T}{100}$$ => $$frac{x imes4 imes2}{100}=350$$ => $$x=frac{35000}{8}=4375$$ Now, interest earned under compound interest = $$P[(1+frac{R}{100})^T-1]$$ = $$4375[(1+frac{4}{100})^2-1]$$ = $$4375[(frac{26}{25})^2-1]$$ = $$4375 imesfrac{676-625}{625}$$ = $$7 imes51=Rs.$$ $$357$$ $$ herefore$$ Difference in interest = $$357-350=Rs.$$ $$7$$ => Ans - (B)
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