Q89 of 96 Page 287

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

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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