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      Question

      Suppose 'S' invested Rs. 40,000 each at 12% p.a. in two

      different Funds for 2 years, with one Fund offering compound interest (compounded annually) and the other offering simple interest, what is the difference between the interest earned from both Funds?
      A Rs.470 Correct Answer Incorrect Answer
      B Rs.570 Correct Answer Incorrect Answer
      C Rs.500 Correct Answer Incorrect Answer
      D Rs.576 Correct Answer Incorrect Answer
      E none of these Correct Answer Incorrect Answer

      Solution

      ATQ, Simple interest earned = (40000 Γ— 12 Γ— 2) Γ· 100 = Rs. 9,600 And compound interest earned = 40000 Γ— {1 + (12/100)}2 - 40000 = Rs. 10,176 So, required difference = 10176 - 9600 = Rs.576

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