Question
A man deposited Rs. 9000 at 10% compound interest,
compounded annually while Rs. 8500 at 13% 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 = 9000 × {(1 + 10/100)3 – 1)} = 9000 × 0.331 = Rs. 2979 Simple interest earned by the man in 3 years = 8500 × 0.13 × 3 = Rs. 3315 Required difference = 3315 – 2979 = Rs. 336
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