Question

What is the difference between the compound interest, when interest is compounded 5-monthly,
and the simple interest on a sum of ₹12,000 for 1 years at 12% per annum?

Answer 1

Step-by-step explanation:

we have to use the formula p{1+R/100}

Answer 2

Difference would be rs 50.73 ( approx )

Step-by-step explanation:

Since, the compound interest formula is,

$I=P(1+r)^{t}-P$

Simple interest formula,

$I=P\times r\times t$

Where,

P = principal,

r = rate of interest per period,

t = number of periods,

If P = 12000, annual rate = 12% = 0.12 ⇒ rate per 5 month = $\frac{0.12\times 5}{12}=0.05$,

Number of periods, t = 12/5 ( 1 year = 12 months )

Thus, compound interest,

$I_1=12000(1+0.05)^\frac{12}{5}-12000$

$=12000(1.05)^\frac{12}{5}-12000$

$\approx 1490.73$ ( using calculator ),

If P = 12000, r = 12% = 0.12, t = 1 year,

Simple interest,

$I_2=12000\times 0.12\times 1=1440$

Hence, the difference in interests,

$I_1-I_2=1490.73-1440=50.73\text{ rupees}$

#Learn more:

Difference between compound interest and simple interest :

https://brainly.in/question/950403