Question:

Difference between SI and CI (compounded annually) on Rs. 2000 for 2 years at 8% per annum.

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Difference between CI and SI for 2 years = SI on the interest of the first year.
Updated On: Aug 11, 2025
  • Rs. 10
  • Rs. 20
  • Rs. 13
  • Rs. 25
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The Correct Option is A

Solution and Explanation

SI for 2 years = \( \frac{2000 \times 8 \times 2}{100} = 320 \) CI = \( 2000 \left( 1 + \frac{8}{100} \right)^2 - 2000 = 2000 \left( 1.08^2 - 1 \right) \) \( 1.08^2 = 1.1664 \), so CI = \( 2000 \times 0.1664 = 332.8 \) Difference = \( 332.8 - 320 = 12.8 \approx 13 \) — matches option (c).
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