Find the difference between the compound interest and simple interest. On a sum of Rs. 50,000 at 10% per annum for 2 years.

Question

Philoid · Accepted Answer

Given,

Principal = Rs.50000

Rate = 10% per annum

Time = 2 years

Hence,

=

Compound interest =

=

So,

Difference between compound interest and simple interest = Rs.(10500 – 10000) = Rs.500