On a certain sum of money, the simple interest for 2 years is Rs.350 at the rate

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Question

On a certain sum of money, the simple interest for 2 years is Rs.350 at the rate of 4% per annum. It was invested at compound interest at the same rate for the same duration as before, how much more interest would be earned?

Options:

A . Rs.35

B . Rs.3.50

C . Rs.14

D . Rs.7

Answer: Option D
Answer: (d)Principal = $\text"S.I. × 100"/ \text"Time × Rate"$= ${350 × 100}/{2 × 4}$ = Rs.4375C.I. = P$[(1 + R/100)^T - 1]$= 4375$[(1 + 4/100)^2 - 1]$= 4375$[(1 + 1/25)^T - 1]$= 4375$[(26/25)^2 - 1]$= 4375$(676/625 - 1)$= ${4375 × 51}/625$ = Rs.357Required difference= Rs.(357 - 350) = Rs.7

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