Varun and Madhur invested ₹25,000 each in different schemes. Varun earned simple interest at 11% per annum, whereas Madhur earned compound interest at 10% per annum compounded annually. Who received more interest after 2 years and how much?

Varun, ₹250

In case of Varun ,

Simple Interest = \(\frac{P × R × T}{100}\)

= \(\frac{25000 × 2 × 11}{100}\)

= 5500

In case of Madhur,

Compound Interest = P$(1 \;+\; \frac{R}{100})^t$ - P

= 25000 × [ 1 + \(\frac{ 10 }{100}\) ]² - 25000

= 25000 × [ \(\frac{ 11 }{10}\) ]² - 25000

= 25000 × \(\frac{ 11 }{10}\) × \(\frac{ 11 }{10}\)  - 25000

= 30250 - 25000

= 5250

Difference b/e simple interest and compound interest = 5500 - 5250 = Rs. 250

So, varun earned more Rs. i.e. 250

Ans :- Varun , Rs. 250