Find the difference between simple interest and true discount on Rs. 960 due 4 year hence at 5% per annum simple interest?

Q: Find the difference between simple interest and true discount on Rs. 960 due 4 year hence at 5% per annum simple interest?

S.I. - T.D. = [A x (R.T)2] / [100(100 + R.T.)] = [960 x (4 x 5)2] / [100 x (100 + 4 x 5)] = [(960 x 20 x 20) / (100 x 120)] = Rs. 32

Rs. 32
Rs. 52
Rs. 42
None of these

Correct Answer: Rs. 32

Explanation:

S.I. - T.D. = [A x (R.T)²] / [100(100 + R.T.)]
= [960 x (4 x 5)²] / [100 x (100 + 4 x 5)]
= [(960 x 20 x 20) / (100 x 120)] = Rs. 32

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