Question
Calculate the difference between the simple interest and the compound interest on $Rs. 4,000$ in $2$ years at $8\%$ per annum compounded yearly.
✓
Answer
For $1^{\text {st }}$ year
$P=\text { Rs. } 4000$
$ R=8$
$ T=1$ year
$\mathrm{T}=1$ year
$I=\frac{4000 \times 8 \times 1}{100}=320$
$A=4000+320=\text { Rs. } 4320$
For $2^{\text {nd }}$ year
$P=\text { Rs. } 4320$
$ R=8 \%$
$ T=1$ year
$ I=\frac{4320 \times 8 \times 1}{100}=\text { Rs. } 345.60$
$A=4320+345.60=4665.60$
Compound interest $=\text { Rs. } 4665.60-\text { Rs. } 4000=\text { Rs. } 665.60$
Simple interest for $2$ years$=\frac{4000 \times 8 \times 2}{100}=\text { Rs. } 640$
Difference of $\mathrm{Cl}$ and $\mathrm{SI}=665.60-640= Rs 25.60 .$
$P=\text { Rs. } 4000$
$ R=8$
$ T=1$ year
$\mathrm{T}=1$ year
$I=\frac{4000 \times 8 \times 1}{100}=320$
$A=4000+320=\text { Rs. } 4320$
For $2^{\text {nd }}$ year
$P=\text { Rs. } 4320$
$ R=8 \%$
$ T=1$ year
$ I=\frac{4320 \times 8 \times 1}{100}=\text { Rs. } 345.60$
$A=4320+345.60=4665.60$
Compound interest $=\text { Rs. } 4665.60-\text { Rs. } 4000=\text { Rs. } 665.60$
Simple interest for $2$ years$=\frac{4000 \times 8 \times 2}{100}=\text { Rs. } 640$
Difference of $\mathrm{Cl}$ and $\mathrm{SI}=665.60-640= Rs 25.60 .$
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