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(A) Method $1$: Step-by-step calculation$1$. Simple Interest $(SI)$ $= \frac{P 	imes R 	imes T}{100} = \frac{4000 	imes 5 	imes 2}{100} = ₹ 400$$2

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$10$

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(A) Method $1$: Step-by-step calculation$1$. Simple Interest $(SI)$ $= \frac{P 	imes R 	imes T}{100} = \frac{4000 	imes 5 	imes 2}{100} = ₹ 400$$2$. Compound Interest $(CI)$ $= P \left(1 + \frac{R}{100}ight)^T - P = 4000 \left(1 + \frac{5}{100}ight)^2 - 4000 = 4000 	imes (1.05)^2 - 4000 = 4000 	imes 1.1025 - 4000 = 4410 - 4000 = ₹ 410$$3$. Difference $= CI - SI = 410 - 400 = ₹ 10$Method $2$: Shortcut formula for $2$ yearsDifference $= P \left(\frac{R}{100}ight)^2 = 4000 	imes \left(\frac{5}{100}ight)^2 = 4000 	imes \frac{25}{10000} = 4000 	imes 0.0025 = ₹ 10$

What is the difference between the compound interest and simple interest on ₹ $4000$ at $5 \%$ per annum for $2$ years?

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