Question

the difference between compound interest and simple interest on 45000 at 12% per annum for 3 ​years is
a)2021
b)2021.76
c)2201
d)2201.76​

Answer 1

Answer ::

The difference between Compound Interest and Simple interest is Rs. 2021.76.

[ Option. d ] is the correct answer.

Step-by-step explanation ::

To Find :-

• The difference between Compound Interest and Simple interest

Solution :-

Given that,

• Principal = Rs. 45000
• Rate = 12% per annum
• Time = 3 years

First we need to find out the simple Interest and the compound interest.

∴ Simple interest is,

As we know that,

Simple interest = ( P × R × T ) / 100

=> ( P × R × T ) / 100

=> ( 45000 × 12 × 3 ) / 100

=> ( 540000 × 3 ) / 100

=> 1620000 / 100

=> 16200

The Simple interest is Rs. 16200.

∴ Compound Interest is,

First we need to find out the amount, as,

Compound interest = Amount - Principal

As we know that,

Amount = Principal ( 1 + R/100 )ᵗ

=> A = P ( 1 + R/100 )ᵗ

=> A = 45000 ( 1 + 12/100 )³

=> A = 45000 ( 28/25 )³

=> A = 45000 × 28/25 × 28/25 × 28/25

=> A = 1800 × 28 × 28/25 × 28/25

=> A = 72 × 28 × 28 × 28/5

=> A = 1580544/25

=> A = 63221.76

Now, the compound interest is,

=> Compound interest = Rs. ( 63221.76 - 45000 )

=> Compound interest = Rs. 18221.76

According the question,

The difference between Compound Interest and Simple interest is,

=> Compound interest - Simple interest

=> Rs. 18221.76 - Rs. 16200

=> Rs. 2021.76

The difference between Compound Interest and Simple interest is Rs. 2021.76.