Question

1. How much more will be the interest earned
on 20,000 at the rate of 20% per annum
for 1.5 years if compounded semi-annually
than the simple interest earned on the same
amount with the same rate of interest for the
same period?​

Answer 1

Principal = 20000₹

interest = 20%

time = 1.5 years

Amount = P ( 1 + R/100 ) 1.5

= 20000 ( 1 + 20/100) 1.5

= 20000 ( 120÷100 × 110÷100)

interest = 6400 at compounded annually

In simple interest = P × R × T ÷ 100

= 20000 × 20 × 1.5 ÷100

interest = 6000

compound interest - simple interest

6400 - 6000

400 interest