Shikha invested Rs. 6400 for 3 years at the rate of per annum compounded annually.

Sneha invested the same amount at the same rate for the same time but on simple interest. Who gets more interest and by how much?

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Sneha, Rs.198.40

Sneha, Rs.146.50

Shikha, Rs.146.50

Shikha, Rs.198.40

answer is D.

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Detailed Solution

Concept- When Shikha and Sneha invest the same amount for the same amount of time at the same rate of interest, we must determine the compound interest and simple interest that they will get, respectively. In order to determine which interest is bigger, we will replace the supplied values in the formula for simple and compound interests. The necessary answer will then be obtained by deducting the other interest from the original amount.
Simple Interest

Compound Interest Question Image

where

is the principal amount,

is the number of years and

is the annual rate of interest.
Here, for both :

1) Shikha :
Interest is compounded annually.
Question Image

2) Sneha :
Interest is simple.
Interest

Rs. 1920.00
So, Shikha gets more interest than Sneha.
The difference in interests

Hence, the correct option is 4.

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