Numerical answer
A sum of ₹4,000 is invested at 15% per annum. Find the positive difference (in ₹) between the compound interest and the simple interest earned on this sum over 2 years.
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Answer: 90
SI for 2 years = 4000 × 15 × 2/100 = 1200. CI for 2 years = 4000×[(1.15)² − 1] = 4000×0.3225 = 1290. Difference = 1290 − 1200 = 90. Shortcut: for 2 years, CI − SI = P(r/100)² = 4000×(0.15)² = 90.
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