Question
A man deposited Rs. 25000 at 10% compound interest,
compounded annually while Rs. 24000 at 12% simple interest per annum. What will be the difference between the compound interest and the simple interest earned by him after 3 years?Solution
Compound interest earned by the man in 3 years = 25000 × {(1 + 10/100)3 – 1)} = 25000 × 0.331 = Rs. 8275 Simple interest earned by the man in 3 years = 24000 × 0.13 × 3 = Rs. 8640 Required difference = 8640 – 8275 = Rs. 365
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