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    Question

    Ajay lent Rs. 80,000 to Rahul at compound interest of 5%

    p.a. (compounded annually) for 2 years. Rahul tricked Ajay by paying simple interest instead. Find the difference in interest.
    A Rs. 200 Correct Answer Incorrect Answer
    B Rs. 300 Correct Answer Incorrect Answer
    C Rs. 400 Correct Answer Incorrect Answer
    D Rs. 500 Correct Answer Incorrect Answer
    E Rs. 600 Correct Answer Incorrect Answer

    Solution

    Amount due at the end of 2 years
    = 80000 ├Ч {1 + (5/100)}┬▓
    = 80000 ├Ч (1.05)┬▓
    = 80000 ├Ч 1.1025
    = Rs. 88,200 So, interest due = 88,200 тИТ 80,000 = Rs. 8,200 Simple interest due after two years = (80,000 ├Ч 5 ├Ч 2) ├╖ 100
    = Rs. 8,000 So, loss incurred by Ajay = 8,200 тИТ 8,000 = Rs. 200

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