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Ex 8.3, 4 - I borrowed Rs 12,000 from Jamshed at 6% per annum simple

Ex 8.3, 4 - Chapter 8 Class 8 Comparing Quantities - Part 2
Ex 8.3, 4 - Chapter 8 Class 8 Comparing Quantities - Part 3

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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) = (𝑃 Γ— 𝑅 Γ— 𝑇)/100 = (12000 Γ— 6 Γ— 2)/100 = 120 Γ— 12 = 1440 Compound Interest Principal (P) = 12,000 Rate (R) = 6% per Annum Time (t) = 2 years. Amount (A) = (1+𝑅/100)^𝑛 A = 12000 Γ— (1+ 6/100)^2 = 12000 Γ— ((100 + 6)/100)^2 Now Amount (A) = Principal + Interest = 12000 + 1440 = 13440 = 12000 Γ— ((100 + 6)/100)^2 = 12000 Γ— (106/100)^2 = 12000 Γ— (106 Γ— 106)/(100 Γ—100) = 12000 Γ— 11236/10000 = (12 Γ— 11236)/10 = 134832/10 = 13483.2 ∴ Amount using Simple interest = Rs 13440 & Amount using Compound interest = Rs 13483.2 Extra Amount = Amount Using Compound interest – Amount using Simple Interest = 13483.2 βˆ’ 13440 = 43.2 ∴ I have to Pay Rs 43.20 extra

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Davneet Singh has done his B.Tech from Indian Institute of Technology, Kanpur. He has been teaching from the past 12 years. He provides courses for Maths, Science, Social Science, Physics, Chemistry, Computer Science at Teachoo.