alleryOn Rs 20,000 for 2 years at 8 per cent, how much more is compound interest than simple interest?
ARs 118
BRs 128
CRs 138
DRs 160
Answer & Solution
Correct answer: B. Rs 128
1. Compound interest = 1600 in year 1 plus 1728 in year 2 = Rs 3,328.
2. Simple interest = (20000 x 8 x 2) / 100 = Rs 3,200.
3. Difference = 3328 - 3200 = Rs 128.
4. The extra Rs 128 is exactly 8 per cent of the first year's interest of Rs 1,600.
5. That is what 'interest on the interest' means over two years.
_Source: syllabus Maths Ch7 'Comparing Quantities', section 7.4_
Keep practising Simple & Compound Interest
Browse all Simple & Compound Interest questions for IBPS Clerk, or explore more Quantitative Aptitude topics.
Related questions
For the same principal, rate and a period of one year, compound interest compounded annualAt simple interest, a sum doubles itself in 8 years. The annual rate is:Find the simple interest on 5,000 at 8% per annum for 3 years.For 10,000 at 10% per annum for 2 years, compound interest exceeds simple interest by:20,000 is borrowed for 2 years at 8% compounded annually. The compound interest is:Compound interest differs from simple interest because compound interest is calculated on:Find the simple interest on 15,000 at 5% per annum for 2 years.A sum of 10,000 is borrowed at 15% per annum simple interest for 2 years. The amount repay