CA Foundation P3 · Chapter 4 · Question 4 of 10
The difference between compound interest and simple interest on ₹15,000 for 2 years at 6% per annum (compounded annually) is:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) ₹54
Explanation
For 2 years, CI − SI = P(R/100)² = 15,000 x (0.06)² = 15,000 x 0.0036 = ₹54. Check: CI = 15,000(1.06² − 1) = 15,000 x 0.1236 = ₹1,854 and SI = 15,000 x 0.06 x 2 = ₹1,800; difference ₹54.
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