Question

Find the difference in simple interest and compound interest on ₹5000 at 20% per annum for 3 years.​

Answer 1

Answer: 640 rupees more in compound interest

Step-by-step explanation:

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Answer 2

The difference in simple interest and compound interest on  ₹5000 at 20% per annum for 3 years is Rs. 640

• Principal amount,P = Rs. 5000 and rate of interest,r = 20% and time,n = 3 years.
• So simple interest = $\frac{P*n*r}{100}$ = $\frac{5000*3*20}{100} = 3000$
• Compound interest = $5000[(1+\frac{r}{100})^{n}-1]$ =- $5000[(1+\frac{20}{100})^{3}-1]$ = 3640
• So the difference between simple interest and compound interest = 3640 - 3000 = 640.