Correct Answer - Option 1 : Rs. 5
Given:
Principal = Rs.12500
Time = 1 year
Actual Rate = 4%
But due to half-yearly
Rate = 2 percent
Formula:
C.I – S.I for 2 years = (P × R2)/100 × 100
Calculation:
Note: Due to half-yearly we use formula C.I – S.I for 2 year
We know that –
C.I – S.I for 2 years = (P × R2)/100 × 100 …………… (1)
Now,
Put all the given values in equation (1) then we get
C.I – S.I for 2 years = (12500 × 22)/100 × 100
⇒ (12500 × 4)/100 × 100
⇒ (125 × 4)/100
⇒ 125/25
⇒ 5
∴ The Difference between C.I and SI for 1 year is Rs. 5