Question

I borrowed Rs 12000 from Jamshed at 6% per annum simple interest for 2 years. Had I borrowed this sum at 6% per annum compound interest, what extra amount would I have to pay?

Answer 1

P = Rs 12000

R = 6% per annum

T = 2 years

To find the compound interest, the amount (A) has to be calculated.

∴ C.I. = A − P = Rs 13483.20 − Rs 12000 = Rs 1,483.20

C.I. − S.I. = Rs 1,483.20 − Rs 1,440 = Rs 43.20

Thus, the extra amount to be paid is Rs 43.20.