Numerical answer
Find the difference between the compound interest and the simple interest on ₹8,000 at 10% per annum for 2 years.
Show answer and solution
Answer: 80
SI = P×r×t/100 = 8000×10×2/100 = 1600. CI = P[(1+r/100)^t − 1] = 8000×(1.21−1) = 1680. Difference = 1680 − 1600 = 80. Shortcut: for 2 years, CI − SI = P(r/100)² = 8000×(0.1)² = 80.
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