Question

find the difference between simple interest and compound interest on ₹12275, at an interest of 16% per annum for 2 years

Answer 1

Simple Interest :-

Simple Interest = PRT/100

= (12275*16*2)/100

=Rs.1964

Compound Interest :-

Amount = P{1+(R/100)}^T

=12275{1+(16/100)}^2

=(12275*116*116) / (100 * 100)

= Rs. 16517.24

CI = Amount - Principle

= 16517.24 - 12275

= Rs . 4242.24

Difference in SI and CI = 4242.24 - 1964

=Rs. 1278.24