Question

7. Ram Prakash borrowed 7 20000 from a bank at 6% pa, simple interest for 2 years. He had borrowed this
sum at 6% pa compound interest, what extra amount would he have to pay?
Maths - 8​

Answer 1

Money borrowed by Ram Prakash from bank = 7,20,000/-

Simple interest payable for 2 years @6% per annum = 7,20,000×2×6/100 = 86,400/-

compound interest = 7,20,000{(1+0.06)²-1} = 88,992

Extra amount payable = 88,992 - 86400 = 2,592/-