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The difference between simple interest and compound on Rs. 1200 for one year at 10% per annum reckoned half-yearly is:

Rs. 2.50
Rs. 3
Rs. 3.75
Rs. 4
Explanation:
S.I. = Rs$ \left(\dfrac{1200 \times 10 \times 1}{100} \right) $= Rs. 120.
C.I. = Rs.$ \left[1200 \times\left(1 +\dfrac{5}{100} \right)^2- 1200\right] $= Rs. 123.

$\therefore$ Difference = Rs. (123 - 120) = Rs. 3.

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