Question

Darshana invests an amount of Rs. 3800 in two schemes at 20% rate of interest per annum. The first scheme compounds interest annually and another compounds interest half yearly what is the difference between compound interests obtained from both schemes?
1. Rs. 52
2. Rs. 38
3. Rs. 45
4. Rs. 32

Answer 1

Correct Answer - Option 2 : Rs. 38

Given:

P = Rs. 3800

R = 20%

n = 2

t = 1 year

Formula used:

A = P × {1 + (R / 100n)}^nt

Where P = Principal amount, R = Rate of interest in %, n = number of times interest applied per year and t = time period

Calculation:

Scheme 1:

Here, interest compounded yearly

⇒ A = 3800 × {1 + (20 / 100)}

⇒ A = 4560

Scheme 2:

Interest compounded half yearly

⇒ A = 3800 × {1 + (20 / 100 × 2)}²

⇒ A = 3800 × {(11 × 11) / (10 × 10)}

⇒ A = 3800 × (121 / 100)

⇒ A = 4598

Required difference = 4598 – 4560

∴ The difference between compound interests obtained from both schemes is Rs. 38.