What is the difference between compound interest and simple interest for 2 yr on the sum of ? 1250 at 4% pa ?

Options

A. Rs. 3
B. Rs. 4
C. Rs. 2
D. Rs. 8

Answer

C

Explanation

Given, `P = Rs. 1250 , n = 2 yr and R = 4%`
According to the formula,
Difference between compound interest and
simple interest for ` 2 yrs = P ((R)/(100))^(2)`
`:.` Required difference ` = (1250 xx 4 xx 4)/( 100 xx 100) = Rs. 2 `