Question

Find the difference between Compound Interest and Simple Interest on Rs 45,000 at 12% per annum for 5 years.

Answer 1

Given that, Principal(P) = Rs.45000, Interest rate(R) = 12% and time period(n) = 5 years.

⇒ We have -

= 45000 × 1.76

⇒ A = Rs. 79200

⇒ Compound Interest = Rs. 79200 – Rs. 45000

= Rs. 34200

⇒ ∴ Difference between Simple interest and compound interest

= Rs.34200 - Rs.27000

= Rs.7200