Q. 89

Find the difference between Compound Interest and Simple Interest on Rs 45,000 at 12% per annum for 5 years.

Answer :

Given that, Principal(P) = Rs.45000, Interest rate(R) = 12% and time period(n) = 5 years.

We have -

= Rs. 27000

Also, Compound Interest = A – P

= 45000 × 1.76

A = Rs. 79200

Compound Interest = Rs. 79200 – Rs. 45000

= Rs. 34200

difference between Simple interest and compound interest

= Rs.34200 - Rs.27000

= Rs.7200

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