Question

Find the difference between the simple interest and compound interest on ₹12500 for 3 years at 12% p.a. compounded annually.

Answer 1

just example

Simple Interest

 Interest is the extra money paid by institutions like banks or post offices on money deposited (kept) with them. Interest is also paid by people when they borrow money. 

 

With Simple interest, the interest is calculated on the same amount of money in each time period, and, therefore, the interest earned in each time period is the same. i.e., If the interest on a sum borrowed for certain period is reckoned uniformly, then it is called simple interest.