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Last updated at Nov. 12, 2018 by Teachoo

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Ex 8.3, 4 I borrowed Rs 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?Simple Interest Principal (P) = 12,000 Rate (R) = 6% per Annum Time (t) = 2 years. Interest (I) = (๐ ร ๐ ร ๐)/100 = (12000 ร 6 ร 2)/100 = 120 ร 12 = 1440 Compound Interest Principal (P) = 12,000 Rate (R) = 6% per Annum Time (t) = 2 years. Amount (A) = (1+๐ /100)^๐ A = 12000 ร (1+ 6/100)^2 = 12000 ร ((100 + 6)/100)^2 Now Amount (A) = Principal + Interest = 12000 + 1440 = 13440 = 12000 ร ((100 + 6)/100)^2 = 12000 ร (106/100)^2 = 12000 ร (106 ร 106)/(100 ร100) = 12000 ร 11236/10000 = (12 ร 11236)/10 = 134832/10 = 13483.2 โด Amount using Simple interest = Rs 13440 & Amount using Compound interest = Rs 13483.2 Extra Amount = Amount Using Compound interest โ Amount using Simple Interest = 13483.2 โ 13440 = 43.2 โด I have to Pay Rs 43.20 extra

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Davneet Singh

Davneet Singh is a graduate from Indian Institute of Technology, Kanpur. He has been teaching from the past 9 years. He provides courses for Maths and Science at Teachoo.