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    Question

    Amit lent Rs. 25,000 to Rohit at compound interest of

    10% p.a. (compounded annually) for 2 years. Rohit however paid him back at simple interest instead of compound interest. Find the difference in the interest to be received by Amit and interest actually received by him.
    A Rs. 250 Correct Answer Incorrect Answer
    B Rs. 300 Correct Answer Incorrect Answer
    C Rs. 500 Correct Answer Incorrect Answer
    D Rs. 550 Correct Answer Incorrect Answer
    E Rs. 450 Correct Answer Incorrect Answer

    Solution

    Amount due at the end of 2 years
    = 25000 ├Ч {1 + (10/100)}┬▓
    = 25000 ├Ч (1.1)┬▓
    = 25000 ├Ч 1.21
    = Rs. 30,250 So, interest due = 30,250 тИТ 25,000 = Rs. 5,250 Simple interest due after two years
    = (25,000 ├Ч 10 ├Ч 2) ├╖ 100
    = Rs. 5,000 So, loss incurred by Amit
    = 5,250 тИТ 5,000
    = Rs. 250

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