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I borrowed ₹ 12000 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?

I borrowed ₹ 12000 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? 

Grade:12

1 Answers

Harshit Singh
askIITians Faculty 5963 Points
3 years ago
Dear Student

P =₹12000
R = 6% per annum
T=2years
S.I. = P x R x T
100
= 12000 x 6 x 2
100
=₹1440
To find the compound interest, the amount (A) has to be calculated.
Amount, A =P (1 +R/100 )^n
=₹ [12000(1+ 6/100 )^2]
=₹ [12000 × (3/50)^2]
=₹[12000×53/50 x 53/50 ]
=₹ 13483.20
∴C.I.= A − P
=₹ 13483.20 − ₹12000
=₹1,483.20
C.I. − S.I. = ₹ 1,483.20 − ₹1,440
=₹43.20
∴ The extra amount to be paid is₹43.20.

​Thanks

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