Calculate Difference Between Compound Interest Simple Interest Three Years And Per Annum

Calculate the difference between the compound interest and the simple interest on ₹ 8,000 in three years and at 10% per annum.

Answers:

Principal (P) = ₹8000

Rate (R) = 10% p.a.

Period (T) = 3 years

∴ S.I. for 3 years = PRT/100 = (8000 × 10 × 3)/100

= ₹2400

Now, S.I. for 1st year = ₹ (8000 × 10 × 1)/100

= 80 × 10 ×1 = ₹800

Amount for the first year = P + S.I.

= ₹ 8000 + ₹800 = ₹8800

Principal for the second year = ₹ 8800

Interest for the second year = (8800 × 10 × 1)/100

= ₹880

∴ Amount after second year = ₹8800 + ₹880

= ₹ 9680

Principal for the third year = ₹9680

Interest for the third year = ₹ (9680 × 10 ×1)/100 = ₹968

∴ C.I. for 3 years = ₹800 + ₹880 + ₹968

= ₹2648

∴ Difference between C.I. and S.I. for 3 years

= ₹ 2648 – ₹2400 = ₹248