Question

I borrowed 12000 from Prasad at 6% per annum simple interest for 2 years. Had
I borrowed this sum at 6% per annum compounded annually, what extra amount would
I have to pay?​

Answer 1

Answer:

Interest when paid as Simple Interest

S.I. =

100

(P×R×T)

S.I. =

100

12000×6×2

S.I. =Rs1440

Interest paid when compounded

Amount=Principal(1+

100

R

)

Time

Amount=12000(1+

100

6

)

2

Amount=13483.20

Interest = 13483.20−12000=Rs1483.20

If compounded annually more Interest paid = 1483.20−1440=Rs43.20

Rounding off to its nearest integer=43 Rs