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

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