Find the difference between the simple interest and compound interest, compoundedannually, on an amount of ₹35,000 at 12% for 3 years.

Correct option is B

Given:

Principal (P) = ₹35,000

Rate of interest (R) = 12% per annum

Time (T) = 3 years

Formula Used:

Formula for the difference between Compound Interest (CI) and Simple Interest (SI) for 3 years:

Difference = $$3P \left(\frac{R}{100}\right)^2 + P \left(\frac{R}{100}\right)^3$$​​

Solution:

Difference = $$35000 \times \left( \frac{12}{100} \right)^2 \times \left( 3 + \frac{12}{100} \right)$$​​

= $$35000 \times (0.12)^2 \times (3 + 0.12)$$​​

= $$35000 \times 0.0144 \times 3.12$$​​

 = $$504 \times 3.12 = ₹1572.48$$​​

Therefore, the difference between the simple interest and compound interest is ₹1,572.48 

Alternate Solution: ​

CI - SI ( for three year) = 504 + 1008 + 60.48 = 1572.48