The given chart gives interest rates offered on deposits by two banks A and B for a period of 5 years (1-5). What would be the difference in interest amount earned in year 3, if a person had deposited Rs.23 lakhs at the beginning of the year in bank B instead of in bank A?

Correct option is C

Given:
Investment = Rs.23 lakhs
Interest rate for year 3 in bank A = 8.5%
Interest rate for year 3 in bank B = 10%
Formula Used:
Interest = $$\frac{Principal × Rate \times time}{100}$$​​
Solution:
Bank A:
InterestA = $$\frac{23,00,000×10\times 1}{100}$$​​
= 230000
Bank B:
InterestB = $$\frac{23,00,000×8.5\times 1}{100}$$​=1,95,500
Difference = InterestA - InterestB
= 2,30,000 - 1,95,500
= 34,500 Rs
The difference in interest amount earned in Year 3, if the deposit was made in Bank B instead of Bank A, is;
Rs. 34,500.