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    Question

    The difference in interest earned between compound and

    simple interest on a given sum at 8% annual interest over two years is Rs. _____. If the same sum were invested at a simple interest rate of 12% per year for six years, the total interest earned would be Rs. _____. I)  384, 43200 II)  288, 32400 III)  192, 21600
    A Only II and III Correct Answer Incorrect Answer
    B Only I and III Correct Answer Incorrect Answer
    C Only I and II Correct Answer Incorrect Answer
    D All I, II and III Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    Answer: D We know that For two years, CI – SI = P x (r/100)2 SI = (P x r x t)/100 (I) Let, the sum be Rs. P P x (8/100)2 = 384 => P = 384 x 100/8 x 100/8 => P = Rs.60000 SI = (60000 x 12 x 6)/100 = Rs.43200 = 43200 => Satisfies the given condition. (II) Let, the sum be Rs. P P x (8/100)2 = 288 => P = 288 x 100/8 x 100/8 => P = Rs.45000 SI = (45000 x 12 x 6)/100 = Rs.32400 = 32400 => Satisfies the given condition. (III) Let, the sum be Rs. P P x (8/100)2 = 192 => P = 192 x 100/8 x 100/8 => P = Rs.30000 SI = (30000 x 12 x 6)/100 = Rs.21600 = 21600 => Satisfies the given condition.

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