Question

Diksha invested Rs 70,000 at the rate of 18% compounded annually for 2 years. Shreya invested Rs 76,000 under simple interest at the rate of 9% per annum for 4 years. Find the difference between the interest of Diksha and Shreya.
1. Rs 108
2. Rs 54
3. Rs 216
4. Rs 90

Answer 1

Correct Answer - Option 1 : Rs 108

Given:

Diksha invested Rs 70,000 at the rate of 18% compounded annually for 2 years.

Shreya invested Rs 76,000 under simple interest at the rate of 9% per annum for 4 years.

Formula Used:

Simple Interest = P × r × t/100

Compound Interest = P[1 + (r/100)^t – 1]

Where,

P → Principal

r → Rate of interest

t → Time

Calculation:

Compound Interest of Diksha = P[(1 + r/100)^t – 1]

⇒ 70,000[(1 + 18/100)² – 1]

⇒ 70,000 × [(118/100)² – 1]

⇒ 70,000 × 1.18 × 1.18 – 70,000

⇒ 97,468 – 70,000

⇒ Rs. 27,468

Simple Interest of Shreya = P × r × t/100

⇒ (76,000 × 9 × 4)/100

⇒ Rs 27,360

Difference between the interest of Diksha and Shreya = 27468 – 27360

⇒ Rs 108

∴ The difference between the interest of Diksha and Shreya is Rs 108.