Question 91

What is the difference between Compound Interest and Simple Interest on Rs.1000 at 10% after 4 years?

Solution

Simple interest SI= P× N×R ÷ 100

P=principle amount

N= Time period

R= rate of interest

SI=1000×10×4÷100

SI=400

For compound interest (CI)

Amount=P×(1+R÷100)^N

Amount=1000×(1+10÷100)^4

Amount=1464.1

Amount=P+CI

CI=Amount-P

CI=464.1

CI-SI=64.1


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