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Determine the difference between compound interest and simple interest on Rs. 10000 for 3 years at 5% per annum. |
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Answer» The amount of Rs. 10000 for 3 years at 5% compound interest per annum `=Rs. 10000xx(1+5/100)^(3)=Rs. 10000xx(105/100)^(3)` `=Rs.1000xx(105xx105xx105)/(100xx100xx100)=rs. 11576.25` `:.` The compound interest `=Rs. (11576.25-10000)=Rs. 1576.25` Again the simple interest for 3 years of Rs. 10000 at 5% per annum `=Rs. (10000xx5xx3)/100=Rs. 1500` Hence the required difference `=Rs. (1576.25-1500)=Rs. 76.25` |
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