Question

arham lent rs 3000 to ashok for 2 years at 6% p.a. simple intrest. how much would ashok gain if he lends the same amount for some period on compound intrest.

Answer 1

Principle(P)=3000
Time(N)=2
Rate(R)=6%

Simple Interest Paid by Ashok to Arham
=(P x N x R)/100
=(3000 x 2 x 6)/100
=360
Therefore Amount Returned by Ashok to Arham
=3000+360=3360

Compound Interest Received by Ashok
=P{[(1+R/100)^n]-1}
=3000 x {[(1 + 6/100)^2]-1}
=3000 x {[(1.06)^2]-1}
=3000 x (1.1236-1)
=3000 x 0.1236
=370.80
Therefore Amount Received by Ashok
=3000+370.80
=3370.80

Amount Gained by Ashok
=3370.80-3360.00
=10.80