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The difference between CI and SI on Rs.1000 for 2 years at 10% per annum is
ARs.5
BRs.20
CRs.10
DRs.15
Answer & Solution
Correct answer: C. Rs.10
1. SI = PRT/100 = 1000 * 10 * 2/100 = 200.
2. CI = P[(1 + r)^n - 1] = 1000 * (1.21 - 1) = 210.
3. Difference = 210 - 200 = 10.
4. So CI exceeds SI by Rs.10 for 2 years at 10%.
_Source: ICAI BoS Foundation Paper 3, Ch 4 'Math of Finance', p.10_
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