Question

Find the difference between compound interest compounded semi-annually and simple interest on Rs.8000 at 10% p.a. in 1½ years.

Answer 1

Simple Interest = PTR/100

substituting we get 1200

Compound Interest:

A = P{1 + R/100}^n where n = number of conversion periods

here n = 3 because compounded semi annually and rate = 5%

substituting we get A = 9261

C.I = 9261 - Principal

= 9261 - 8000 = 1261

Difference between CI and SI is 61 rupees.