Question

Pooja took Rs.20,000 at compound interest at 10% rate of interest for 3 years from 'Stuti Finance Company'. If Pooja took Rs.20,000 at simple interest at 10% rate of interest for 3 years then how much less amount will she have to pay?

Answer 1

He will get Rs 620 less

Answer 2

Solution :

i ) compound interest :

principal ( p ) = Rs 20000

Rate of interest ( r ) = 10%

Time ( t ) = 3 years

number of times Interest paid ( n ) = 3

Amount ( A ) = p( 1 + r/100 )ⁿ.

= 20000( 1 + 10/100 )³

= 20000( 1 + 1/10 )³

= 20000( 11/10 )³

= 20000 × ( 11/10 )( 11/10 )(11/10 )

= 20 × 1331

= Rs 26620

Compound interest (C.I) = A - p

= Rs 26620 - Rs 20000

= Rs 6620

ii ) Simple interest ( S.I )

p = Rs 20000

t = 3 years

r = 10%

S.I = ( ptr )/100

= ( 20000 × 3 × 10 )/100

= 200 × 3 × 10

= Rs 6000

Difference = C.I - S.I

= Rs 6620 - Rs 6000

= Rs 620

Therefore ,

Pooja pay Rs 620 less amount .

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