Question

I borrowed ₹12,000 at 10% per annum simple interest for 2 years. Had I borrowed this sum at 10% per annum compound interest for 2 years, then the extra amount I have to pay will be ?​

Answer 1

Answer:

Step-by-step explanation:

principal(p)=12000, rate (r)=10%, time=2years(n=2)

simple interest=(principal*rate*time)/100

= (12000*10*2)/100

= 2400

compound interest= {p(1+r/100)^n}-p

={12000-(1+10/100)^2} - 12000

=14520-12000

= 2520

hence in compound interest is more than simple interest by   2520-2400

= 120 rupees extra.