Question

Ahmed lent Amir Rs 8000 at simple interest for 3 years at the rate of 5% per annum. How much more would he have gained, had he lent it at compound interest?

Answer 1

given
p = 8000
rate 5%
Time 3 years
SI = P × R × T/ 100
8000* 5%* 3 / 100
= 1200
CI = A - p = 8000-1200. =. 7800

Answer 2

Answer-

He could have gained 61 rupees more, if had given had given in compound interest.

Solution-

Simple Interest calculation-

Principal = 8000

Rate of interest = 5%

Time = 3

Putting in the formula for interest,

$\Rightarrow i=\frac{P\times R\times t}{100}$

$\Rightarrow i=\frac{8000\times 5\times 3}{100}$

$\Rightarrow i=1200$

Compound Interest calculation-

Principal = 8000

Rate of interest = 5% compounded annually

Time = 3

Putting in the formula for compound interest,

$\Rightarrow i=P(1+\frac{R}{100})^n-P$

$\Rightarrow i=8000(1+\frac{5}{100})^3-8000$

$\Rightarrow i=9261-8000$

$\Rightarrow i=1261$

Therefore, the difference between the interests, 1261-1200 = 61