Numerical answer
A sum of ₹15,000 is invested at 8% per annum. Find the difference between the compound interest and the simple interest earned on this sum over 2 years (in ₹).
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Answer: 96
For 2 years, CI − SI = P×(r/100)². Here P = 15000, r = 8, so difference = 15000 × (8/100)² = 15000 × 0.0064 = ₹96. This shortcut formula (only valid for exactly 2 years) avoids computing CI and SI separately: CI = 15000×1.08²−15000 = 2496, SI = 15000×0.08×2 = 2400, and indeed 2496−2400 = 96.
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