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CAT 2022 Slot 1 · Quant · Simple and Compound Interest · medium

The difference between the compound interest and simple interest on a sum of ₹15,000 for 2 years at 8% per annum (compounded annually) is:

Single correct option

The difference between the compound interest and simple interest on a sum of ₹15,000 for 2 years at 8% per annum (compounded annually) is:
  1. A. ₹90
  2. B. ₹96
  3. C. ₹100
  4. D. ₹120
Show answer and solution

Answer: (B) ₹96

For 2 years, CI − SI = P(r/100)². Here P = 15000, r = 8, so difference = 15000 × (0.08)² = 15000 × 0.0064 = ₹96. This shortcut formula (valid only for 2 years) avoids computing CI and SI separately — remember it saves significant time on such questions.
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Original question written in the CAT 2022 Slot 1 pattern and checked twice for the correct answer. Not an official question paper. How we write and check questions · Corrections policy · Report a mistake