Question

The difference in the simple interest and compound interest on a principal of rs. 10,00,000 in 3 years at 4% per annum is

Answer 1

Rs.295136

Step-by-step explanation:

Principal = Rs.10,00,000

Time = 3 years

Rate of interest = 4% = 0.04

A=P(1+r)^t

A=1000000(1+0.04)^3

Compound interest = Amount - Principal = 1124864-1000000=Rs.124864

Simple interest = \frac{P\times R\times T}{100}

where R is in percent

Simple interest =

Simple interest = 420000

Difference between simple interest and compound interest = 420000-124864=Rs.295136

Hence Difference between simple interest and compound interest is Rs.295136