Question

Find the difference between compound interest and simple interest on * 80,000 for
1 year at 7%, if the interest is compounded semi-annually.
3.
%​

Answer 1

Answer:

Given

P=Rs.8,000

N=3years

R=10%

Simple Interest I=

100

PNR

So, Simple Interest in 3 years I=

100

8,000×3×10

=Rs.2,400

And Amount after "n" years of interest being compounded annually A=P(1+

100

R

)

n

So, Amount after 3 years of compound interest A=8,000×(1+

100

10

)

3

=8,000×1.1

3

=Rs.10,648

So, Compound Interest =A−P=Rs.10,648−Rs.8,000=Rs.2,648

And difference in CI and SI =Rs.2,648−Rs.2,400=Rs.248