Question

the difference in simple interest and compound interest for 2000 rupees at 10% per annum in 2 years compounded annually is how much

Answer 1

The amount at the end of “n" years of Investing in compound interest,

A=P(1+r100)nAP1r100n

Here, the Principal P = 20,000, number of years n = 2, rate of interest r = 20%.

Therefore, Amount A=20000(1+20100)2=20000(3625)A200001201002200003625 = Rs.28,800.

Compound Interest C.I. = Amount - Principal = 28,800 - 20,000 = Rs.8,800.