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Find the difference between the simple interest and the compound interest at 5% per annum for 2 years on principal of Rs. 2000.

A. 5 B. 10.5 C. 4.5 D. 5.5 Answer: Option A
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Solution(By Apex Team)

$\begin{array}{l}\text{The difference between compound interest and}\\ \text{simple interest over two years is given by}\end{array}$ $\frac{\operatorname{Pr}^{2}}{100^{2}} \text { or } P\left(\frac{r}{100}\right)^{2}$ $\begin{array}{l}\text{Here, Principal (P) = Rs. 2000}\\ \text{Rate (r) = 5%}\\ \text{Now, difference,}\\ D=\frac{2000 \times 5 \times 5}{100 \times 100} \\ D=R s .5 \end{array}$

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