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Find the Difference Between Simple Interest and Compound Interest on ₹20000 at 8 P.C.P.A. - SSC (English Medium) Class 8 - Mathematics

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Question

Find the difference between simple interest and compound interest on ₹20000 at 8 p.c.p.a.

Solution

Disclaimer: In the question "Time" is not given. So the question is solved taking time as 2 years, because simple interest and compound interest will be same for one year.

Here, P = Principal = ₹ 20000
R = 8 %
N = 2 years

Simple interest = `("P" xx "R" xx "N")/100`

                         = `(20000 xx 8 xx 2)/100`

                         = 3200

Amount = `"P" (1 + "R"/100)^"N"`

              = 20000 `(1 + 8/100)^2`

              = 20000 `(1 + 2/25)^2`

              = 20000 `(27/25)^2`

             = 23328

Compound interest = 23328 - 20000

                                = 3328

Compound interest - Simple interest = 3328 - 3000 

                                                            = 128

Hence, the difference between simple interest and compound interest is ₹ 128.

  Is there an error in this question or solution?

APPEARS IN

 Balbharati Solution for Balbharati Class 8 Mathematics (2019 to Current)
Chapter 14: Compound interest
Practice Set 14.2 | Q: 10 | Page no. 93
Solution Find the Difference Between Simple Interest and Compound Interest on ₹20000 at 8 P.C.P.A. Concept: Application of Formula for Compound Interest.
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