Question

The difference between the compound interest and simple interest for 2 years at 4% p.a. on
a certain sum is rs 8. Find the sum.​

Answer 1

Answer:

Sometimes you are given a situation and you have the option of repaying more it through compound interest or through simple interest. Obviously, you will choose simple interest because it is a cheaper option. Also, in compound interest, you are asked to pay the principal amount by levying interest on interest. But you would still need to determine the difference between the compound and simple interest. If the difference asked is for either two or three years than you can easily solve it through the formulas. Here are the formulas to the calculated difference in interests.