I borrows ₹ 12,000 from Jamshed at 6% per annum simple interest for 2 years. Had I borrowed this sum at 6% per annum compound interest, what extra amount would I have to pay?

Here, Principal (P) = ₹12,000, Time (T) = 2 years, Rate of interest (R) = 6% p.a.
Simple Interest = PxRxT/100 = 12000x6x2/100 = ₹ 1,440
Had he borrowed this sum at 6% p.a., then
Compound Interest = P (1+R/100)ⁿ – P=12000(1+6/100)²-12000
= 12000(1+3/50)² – 12000 = 12000(53/50)² – 12000
= 12000 x 53/50 x53/50 – 12000 = ₹ 13,483.20 – ₹ 12,000
= ₹ 1,483.20
Difference in both interests = ₹ 1,483.20 – ₹ 1,440.00 = ₹ 43.20

Class 8 Maths Chapter 8 Exercise 8.3 Solution in Video

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