Question

Find the difference between compound interest and simple interest on an amount of ₹17,500 for 2 years at 8% per annum.

Answer 1

Given P = ₹17500, T = 2 years and R = 8%

Simple Interest = $\frac{P\times T\times R}{100}$

= $\frac{17500\times 2\times 8}{100}$

= ₹2800

Compound Interest $=P(1+\frac{R}{100}{)}^T-P$
$=17500(1+\frac{8}{100}{)}^2-17500$
= ₹2912

Difference between C.I. and S.I.
= ₹2912 - ₹2800
= ₹112