Question

4. I borrowed 12,000 from Jamshed at 6% per annum simple interest for 2 years.Had I borrowed this sum at 6% per annum compound interest, what extra amount
would I have to pay?​

Answer 1

Answer:

P = Rs 12000

R = 6% per annum

T = 2 years

S.I =

P x R x T100 =Rs(12000×6×2100)=Rs1440

To find the compound interest, the amount (A) has to be calculated.

A=P(1+R100)^n=Rs[12000(1+6100)2]

=Rs[12000(1+350)^2]=Rs(12000×5350×5350)

= Rs 13483.20

∴ C.I. = A − P = Rs 13483.20 − Rs 12000 = Rs 1,483.20

C.I. − S.I. = Rs 1,483.20 − Rs 1,440 = Rs 43.20

Thus, the extra amount to be paid is Rs 43.20