Let x be the compound interest at the end of 3 years on a sum of Rs.1000 at the rate of 10% compounded annually and y be the simple interest at the end of 3 years on a sum of Rs.1000 at end annual rate of 11%. What is the difference between x and y?

Correct option is D

Given:

Principal = ₹ 1000

Rate for CI = 10%

Rate for SI = 11%

Time = 3 years

Formula Used:

Compound Interest (CI) Formula:

CI = P(1 + R/100)^T- P

Simple Interest (SI) Formula:

SI = P × R × T / 100

Solution:

For Compound Interest:

CI = 1000(1 + 10/100)³- 1000

=> CI = 1000(1 + 0.1)³- 1000

=> CI = 1000(1.1)³- 1000

=> CI = 1000(1.331) - 1000

=> CI = 1331 - 1000

=> CI = ₹ 331

For Simple Interest:

SI = 1000 × 11 × 3 / 100

=> SI = 1000 × 33 / 100

=> SI = 330

=> SI = ₹ 330

Difference between CI and SI:

Difference = CI - SI

=> Difference = 331 - 330

=> Difference = ₹ 1