Calculate the difference between the compound interest and the simple interest on ₹ 7,500 in two years and at 8% per annum.
Answers:
Principal (P) = ₹7500
Rate (R) = 8% p.a.
Period (T) = 2 Years
∴ Simple interest = PRT/100 = (7500 × 8 × 2)/100
= ₹ 1200
Interest for the first year = (7500 × 8 × 1)/100
= ₹ 600
∴ Amount at the end of first year = P + S.I.
= ₹ 7500 + ₹600
= ₹ 8100
Principal for the second year = ₹8100
∴ Interest for the second year = (8100 × 8 × 1)/100
= ₹ 648
∴ Total C.I. for 2 years = ₹600 + ₹648
= ₹ 1248
∴ Difference between C.I. and S.I. for 2 years
= ₹ 1248 – ₹1200 = ₹48