Question

Find the difference between simple interest and the compound interest on rs 2000 for 2 years at 8% per annum

Answer 1

given :

Principle :

2,000 RS

rate of Interest :

8%

period :

2 yrs




$\bold{simple \: interest}$

$\frac{principle \times rate \: of \: interest \times period}{100} \\ \\ \frac{2000 \times 2 \times 8}{100} \\ \\ 320$




$\bold{amount \: for \: compound \: interest}$

$p ({1 + \frac{r}{100}) }^{n}$

$2000( {1 + \frac{8}{100}) }^{2} \\ \\ 2000 ({ \frac{108}{100} ) }^{2} \\ \\ 2000 \times \frac{108}{100} \times \frac{108}{100} \\ \\ 2 \times 108 \times \frac{108}{10} \\ \\ 108 \times \frac{108}{5} \\ \\ 2332.8 \: rs \:$




$\bold{compound \: interest}$

amount - principle

2332.8 - 2000

332.8 RS




$\bold{difference \: between \: simple \: interest \: and \: compound \: interst}$

compound interest - simple interest

332.8 - 320

2.8 RS




$\bold {so \: the \: difference \: is \: of \: rs \: 2.8}$