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Simple Interest vs Compound Interest

CMAT 2025 · Quantitative Techniques & Data Interpretation · Medium · Quantitative Aptitude

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Equal amounts of each ₹ 1,000 is lent to two persons for 3 years one @ 30% simple interest and second at 30% compound interest annually. By how much percent is the compound interest greater than the simple interest received in this 3 years duration.

  1. A.

    23%

  2. B.

    33%

  3. C.

    33.33%

  4. D.

    30%

Answer

B

Explanation

Simple Interest for 3 years = 1000×30%×3=₹9001000 \times 30\% \times 3 = ₹900.

Compound Interest Amount =1000×(1.3)3=1000×2.197=₹2197= 1000 \times (1.3)^3 = 1000 \times 2.197 = ₹2197. CI=2197−1000=₹1197CI = 2197 - 1000 = ₹1197.

Difference =1197−900=₹297= 1197 - 900 = ₹297.

Percentage by which CI is greater than SI: =297900×100=33%= \frac{297}{900} \times 100 = 33\%

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