What is the difference in compound interest earned in 1 year on a sum of Rs. 10,000 at the rate of 40% per annum compounded quarterly and annually?
Answer & explanation
Correct answer: option 2
Annually rate = 40%
Quarterly rate = \(\frac{40}{4}\) = 10%
Total C.I. of 4 quarters = 46.41%
Difference = 46.41% – 40% = 6.41%
Difference (in Rs.) = 10000 × 6.41% = Rs.641