The compound interest on a sum for 2 years is Rs. 832 and the simple interest on the same sum for the same period is Rs. 800. The difference between the compound and simple interest for 3 years will be?

Rs .48
Rs. 66.56
Rs. 98.56
None of these

Correct Answer: Rs. 98.56

Explanation:

S.I. for first year = Rs. 400
S.I. on Rs .400 for 1 year =Rs. 32
∴ Rate = (interest x 100)/(principle x time) = (100 x 32)/(400 x 1) = 8%
Hence, the difference for 3rd year is S.I.on Rs. 832
= Rs.(832 x 8/100)
= Rs. 66.56
∴ Total difference = Rs.(32 + 66.56)
= Rs. 98.56

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