Question

7. Calculate the difference between the compound interest and the simple interest on
320000 in 2 years at 8% per annum.​

Answer 1

Answer:

128

Explanation:

Principal (P) = Rs 20000

Rate (R) = 8% p.a.

Period (T) = 2 years

Hence,

Simple interest (S.I.) = PRT / 100

= Rs (20000 × 8 × 2) / 100

We get,

= Rs 3200

Now,

Amount on compound interest

A = P {1 + (R / 100)}n

= RS 20000 {1 + (8 / 100)}2

On further calculation,

We get,

= Rs 20000 × (27 / 25) × (27 / 25)

= Rs 32 × 729

= Rs 23328

Therefore,

Compound interest = Final amount – (original) Principal

= Rs 23328 – Rs 20000

We get,

= Rs 3328

Hence,

Difference in compound interest – simple interest

= Rs 3328 – Rs 3200

= Rs 128