Correct Answer - Option 3 : Rs. 120
Given:
Principal = Rs. 12000
Rate = 10%
Time = 2 years
Formula used:
SI = (P × R × T)/100
Calculation:
SI = (12000 × 10 × 2)/100
⇒ 2400
CI for the first year = (12000 × 10 × 1)/100
⇒ 1200
CI for the second year = (13200 × 10 × 1)/100
⇒ 1320
CI = (1200 + 1320) = 2520
Difference between SI and CI = (2520 – 2400) = 120
∴ Required difference is Rs. 120