Mukunthan invests Rs 30000 for 3 months in a bank which gives CI at the rate of 12% pa, compounded monthly. A private company offers his S.I at the rate of 12% p.a.What is the difference in the interests received by Mukunthan? Do by traditional method and verify your answer by calculator.
Answers
Difference in Compound & Simple interest = 9.3 Rs
Step-by-step explanation:
Mukunthan invests Rs 30000 for 3 months in a bank which gives CI at the rate of 12% pa,compounded monthly
=> Rate of interest = R = 1 % per month
Time = n = 3 Months
P = Amount Deposited = Rs 30000
Interest Received = 30000( 1 + R/100)ⁿ - 30000 ( Calculator method)
= 30000 ( 1 + 1/100)³ - 30000
= 909.3 Rs
Using Traditional Method
Interest for 1 st month = 30000 * 1 * 1 /100 = 300
Interest for 2nd Month = (30000 + 300) * 1 * 1 /100 = 303
Interest for 3rd month = (30000 + 300 + 303) * 1 * 1/100 = 306.03
Total Interest after 3 months = 300 + 303 + 306.3 = 909.3 Rs
Traditional Method = Calculator = 909.3 Rs
Interest with Simple Interest
= 30000 * 1 * 3/100
= 900 Rs
Difference in Compound & Simple interest = 909.3 - 900 = 9.3 Rs