# I borrowed Rs. 12000 from Prasad at 6% per annum simple interest for 2 years. Had I borrowed this sum at 6% per annum compounded annually, what extra amount would I have to pay?

Principal (P) = Rs. 12000

Rate of interest (R) = 6%

Time period (T) = 2years

I = Rs. 1440

Interest for 2 years is Rs. 1440

This sum to be borrowed at 6% per annum compounded annually,

Principal (P) = Rs. 12000

Rate of interest (R) = 6%

Time period (n) = 2years

= 12000×1.062

= 13483.2

Amount = Rs. 13483.2

= 13483.2-12000

Compound Interest = Rs. 1483.2

The difference in interest = 1483.2 - 1440

= Rs. 43.2

The difference in interest is Rs. 43.2

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