Question

Calculate the difference between the compound interest and the simple interest on Rs. 8000 in three years and at 10% per annum.

Answer 1

Principal(P)=Rs. 8000
Rate(R)=10% p.a.
Period(T)=3 years
$\therefore$ S.I for 3 years= $\frac{PTR}{100}=\frac{8000\times 10\times 3}{100}$
=Rs. 2400
Now, S.I. for 1st year = $Rs.\frac{8000\times 10\times 1}{100}$
$=80\times 10\times 1$
Amount for the first year=P+S.I.
=Rs. 8000 + Rs. 800=Rs. 8800
Principal for the second year= Rs. 8800
Interest for the second year= $\frac{8800\times 10\times 1}{100}$
=Rs. 880
$\therefore$ Amount after second year= Rs. 8800 + Rs. 880
=Rs. 9680
Principal for the third year= Rs. 9680
Interest for the third year
= $Rs.\frac{9680\times 10\times 1}{100}=Rs.968$
$\therefore$ C.I. for 3 years= Rs. 800+ Rs. 880+Rs. 968
$\therefore$ Difference between C.I. and S.I. for 3 years
=Rs. 2648-Rs. 2400 =Rs. 248