Two banks, A and B, offered loans at 3.5% and 6% per annum, respectively. Mukund borrowed an amount of ₹440000 from each bank. Find the positive difference between the amounts of simple interest paid to the two banks by Mukund after 4 years.

Correct option is B

Given:

Principal borrowed from Bank A = ₹4,40,000

Principal borrowed from Bank B = ₹4,40,000

Rate of Bank A = 3.5% per annum

Rate of Bank B = 6% per annum

Time = 4 years

Need: Positive difference between simple interests

Formula Used:

SI =$$\dfrac{P \times R \times T}{100}$$​

Required Difference = $$|SI_B - SI_A|$$​​

Solution:

For Bank A:

​$$SI_A = \dfrac{440000 \times 3.5 \times 4}{100}$$​

=$$\dfrac{440000 \times 14}{100} = 61600$$​

For Bank B:

​$$SI_B = \dfrac{440000 \times 6 \times 4}{100}$$​

​$$= \dfrac{440000 \times 24}{100} = 105600$$​

Difference:

​$$|SI_B - SI_A| = |105600 - 61600| = 44000$$​