Question

Find the difference between the simple interest and the compound interest on a sum of 120,000 at the rate of 10% per annum compounded half-yearly for l years.

Answer 1

p=120000
r=10℅per annum
=10/2=5per half year
t=1year=2half years
amount for first half year =(p×r×t)/100
so,
(120000×5×1)/100
=6000
p for second half year=120000+6000
=126000
amount for second half year=(p×r×t)/100
=(126000×5×1)/100
=6300
compound interest=a+p
=126000+6300
=132300
simple interest=p×r×t
=(120000×5×2)/100
=12000
difference b/w C.I and S.I=132300-12000
=120300