Question

What is the difference between the compound interest and simple interest on a sum of rs 20000 at the end of three years if rate of interest for the first year is 5% per annum, for second year is 4% per annum and the third year is 2% per annum?

Answer 1

Amt. is 20000

Simple Interest.
1st Year Interest 1000
2nd Year Interest 800
3rd Year Interest 400
Total Interest 2200.

Compound Interest.
1st Yr. 1000
2nd Yr. 840
3rd Yr. 436.80
Total Interest Will 2276.80

Difference is 70.80 More Interest