For compound interest,
A = P (1+r100)t
[0.5 marks]
Here,
A = 40,000(1+10100)2
⇒ A = 40,000(1110)2
⇒ A = 40,000(121100)
⇒ A = 400 × 121
⇒ A = ₹48,400
[2 marks]
So, compound Interest = ₹48,400 − ₹40,000 = ₹8,400
[0.5 marks]
Now, simple Interest = (P × r × t )100
[0.5 marks]
So, Simple Interest = (40000 × 10 × 2 )100
Simple Interest = 400 × 10 × 2 = ₹8,000
[1 mark]
So, compound interest (₹8,400) is more than simple interest (₹8,000) by ₹400 at the same rate and for same period.
[0.5 marks]