The difference between simple interest and compound on Rs. 1200 for one year at 10% per annum reckoned half-yearly is:
papay dey Answered question 7 days ago
Simple Interest (SI) formula:
SI = (P × R × Time) / 100
Given values:
P = Rs. 1200
R = 10% per annum
Time = 1 year
SI = (1200 × 10 × 1) / 100
= 120
Compound Interest (CI) formula:
CI = P × (1 + R/n)^n – P
where n = number of compounding periods per year
R/n = half-yearly rate = 10/2 = 5%
CI = 1200 × (1 + 5/100)^2 – 1200
= 1200 × (1.05)^2 – 1200
= 1200 × 1.1025 – 1200
= 1323 – 1200
= 123
Difference between CI and SI:
= CI – SI
= 123 – 120
= 3
The difference between simple interest and compound interest is Rs. 3.
papay dey Answered question 7 days ago
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