What is the difference between the compound interest and simple interest for the sum of 2000 over a?

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40 Questions 40 Marks 40 Mins

Given:

Principal = Rs. 2000

Time = 3 years

Rate% = 10%

Formula used:

Simple Interest = P × r × t

Compound Interest = P(1 + r/100)t – P

Where P = Principal

r = rate %

t = time

Calculation:

According to the question,

Simple Interest = P × r × t

⇒ SI = 2000 × 10/100 × 3

⇒ SI = Rs. 600

Compound Interest = P(1 + r/100)t – P

⇒ CI = 2000(1 + 10/100)3 – 2000

⇒ CI = 2000(11/10)3 - 2000

⇒ CI = (2000 × 1331/1000) – 2000 

⇒ CI = 2662 – 2000 

⇒CI = Rs. 662 

⇒ Difference between CI and SI = 662 – 600 = Rs. 62

∴ The difference between compound and simple interest is Rs. 62 

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What is the difference between the simple interest S.I on a sum of ₹ 2,000 being calculated at 6 % for 3 years and 7 % for 3 years?

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