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    Question

    Calculate the difference between the simple interest and

    compound interest accrued on an amount of Rs. 1600 over a period of 2 years at an annual interest rate of 20%.
    A Rs. 56 Correct Answer Incorrect Answer
    B Rs. 64 Correct Answer Incorrect Answer
    C Rs. 72 Correct Answer Incorrect Answer
    D Rs. 48 Correct Answer Incorrect Answer
    E None of these Correct Answer Incorrect Answer

    Solution

    Desired difference = 1600 X [(1.2)┬а2┬а- 1] - 1600 X 0.20 X 2 = 704 - 640 = Rs. 64 Hence, option b.

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