Person A invested Rs 6000 in a bank at a simple interest rate of 5% per annum. Person B invested Rs 5000 at an 8% annual compound interest rate. What is the difference between the interest earned by B and A after 2 years?

Explanation

The simple interest earned by A is calculated as: SI = 6000 × 5/100 × 2 = Rs 600. The compound interest earned by B is: CI = 5000 × (1 + 8/100)^2 - 5000 = 5000 × (1.08)^2 - 5000 = 5000 × 1.1664 - 5000 = Rs 832. The difference between B's compound interest and A's simple interest is Rs 832 - Rs 600 = Rs 232.