Question

I borrowed Rs. $12,000$ from Suresh 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

For SI, principal $=$Rs. $12,000$

Time $=2$ yrs

Rate $=6\%$ p.a.

SI $=\frac{PRT}{100}=$Rs. $\frac{12000\times 12\times 6}{100}=$ Rs. $1440$

For CI, principal $=$Rs. $12,000$, Time $=2$ yrs

Rate $=6\%$ p.a

Amount $=p{(1+\frac{R}{100})}^n$

$=12,000{(1+\frac{6}{100})}^2$

$=12,000\times \frac{53}{50}\times \frac{53}{50}$

$=$ Rs. $\frac{48\times 53\times 53}{10}=$ Rs. $13483.20$

$\therefore C.I.=$ Rs. $13483.20-$ Rs. $12,000=$ Rs. $1483.20$

Excess amount $=$ Rs. $1483.20-$Rs. $1440=$ Rs. $43.20$.