Question

calculate the difference between compound interest and simple interest on Rupees 20000 in 2 year at 8 percent per annum

Answer 1

The amount at the end of “n" years of Investing in compound interest, 

A=P(1+r100)nA=P(1+r100)n

Here, the Principal P = 20,000, number of years n = 2, rate of interest r = 20%. 

Therefore, Amount A=20000(1+20100)2=20000(3625)A=20000(1+20100)2=20000(3625)= Rs.28,800. 

Compound Interest C.I. = Amount - Principal = 28,800 - 20,000 = Rs.8,800.