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If a man going to open a bank account. Two banks A and B are in town, A gives 10% per annum S.I. and B gives 10% per annum C.I. Which bank gives more interest after 2 years and how much on the sum of money Rs. 1000.

If a man going to open a bank account. Two banks A and B are in town, A gives 10% per annum S.I. and B gives 10% per annum C.I. Which bank gives more interest after 2 years and how much on the sum of money Rs. 1000. Correct Answer Bank B, Rs. 10

Given:

Principal = Rs. 1000

Rate of interest given by A = 10% S.I.

Rate of interest given by B = 10% C.I.

Time = 2 year

Formula used:

S.I. = P × R% × T

Amount at C.I. = P(1 + R%)T

Calculation:

Interest is given by bank A:

S.I. = P × R% × T

⇒ S.I. = 1000 × 10/100 × 2

⇒ S.I. = Rs. 200

The interest is given by bank A = Rs. 200

Interest is given by bank B:

Amount = P(1 + R%)T

⇒ Amount = 1000(1 + 10/100)2

⇒ Amount = 1000 × (11/10)2

⇒ Amount = 1000 × 121/100

⇒ Amount = Rs. 1210

C.I. = Amount – Principal

C.I. = 1210 – 1000

⇒ C.I. = Rs. 210

Required difference = C.I. – S.I.

⇒ Required difference = 210 – 200 = 10

∴ Bank B gives Rs. 10 more interest than A. 

Short trick:

 

Interest given by A = 200

Interest given by B = 100 + 100 + 10 = 210

Required difference = 210 – 200 = 10

∴ Required difference is Rs. 10.

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