Question

Find the difference between compound interest and simple interest on Rs.12,000 and in  `1 1/2` years at 10% compounded yearly.

Answer 1

Given: P = Rs. 12,000

n =  `1 1/2` years

r = 10%

Formula: S.I. = `[ P xx R xx T ]/100` 

= `[ 12,000 xx 10 xx 3/2 ]/100`

= Rs. 1,800

To Calculate C.I. annually

P = Rs. 12,000

n = 1 year

r = 10%

A = `P( 1 + r/100)^n  (1 + r/200)^(1/2xx2)`

= `12,000( 1 + 10/100 ) (1 + 10/200)` 

= `12000 xx 11/10 xx 21/20`

= 660 × 21

= Rs. 13,860

C.I = 13860 − 12000

= 1860

So Difference between C.I

= C.I − S.I

= 1860 − 1800

= ₹ 60