Question

find out the difference between Simple intrest and compound interest on RS, 40,000 at 10 % p.a for 2 years.
​

Answer 1

Answer:

N=2years

R=8 %

P=Rs4,000

We have S.I.=

100

PNR

=

100

4,000×2×8

=Rs640

And on interest being compounded for 2 years and R=8 %, Amount=P(1+

100

R

)

N

=4,000×(1+

100

8

)

2

=4,000×1.08×1.08=Rs4,665.60

So, C.I.=A−P=4,665.60−4,000=665.60

And required difference C.I.=S.I.=665.60=640=Rs25.60