Question

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

Answer 1

Given :-

• Principle = Rs. 12500
• Time = 3 years
• Rate = 12%

To Find :-

• Difference between simple interest and compound interest.

Solution :-

Simple interest -

$\huge{\mathtt{\boxed{\green{S.I.\:=\: \frac{P×R×T}{100}}}}}$

Where,

• S.I. = Simple interest
• P = principle
• R = Rate
• T = Time

Substituing the value in the above formula

$\implies S.I. = \frac{12500 × 12 × 3}{100}$

$\implies S.I. = \frac{\cancel{450000}}{\cancel{100}}$

$\huge{\boxed{\mathtt{\red{S.I.\:=\:Rs.\:4500}}}}$

Amount = Principle + Interest

= 12500 + 4500

$\large{\boxed{\mathtt{\purple{Amount\:=\:Rs.17000}}}}$

Compound interest -

$\large{\mathtt{\boxed{\orange{A\:=\:P \times{(1 + \frac{R}{100})}^{t}}}}}$

Where,

• A = Amount
• P = Principle
• R = Rate
• T = time

Substituting the value in the above formula

$\implies \: A = 12500 {(1 + \frac{12}{100} )}^{3}$

$\implies \: A = 12500 {( \frac{100 + 12}{100}) }^{3}$

$\implies \: A = 12500 \times \frac{112}{100} \times \frac{112}{100} \times \frac{112}{100}$

$\implies \: A = 12500\times1.12\times1.12\times1.12$

$\implies \: A = Rs.\:17561.6$

Difference :-

Compound interest - Simple interest

= 17561.6 - 17000

$\huge{\mathtt{\boxed{\pink{Rs.\:561.6}}}}$

Answer 2

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