Question
Suppose 'S' invested Rs. 40,000 each at 12% p.a. in two
different Funds for 2 years, with one Fund offering compound interest (compounded annually) and the other offering simple interest, what is the difference between the interest earned from both Funds?Solution
ATQ, Simple interest earned = (40000 ├Ч 12 ├Ч 2) ├╖ 100 = Rs. 9,600 And compound interest earned = 40000 ├Ч {1 + (12/100)}2 - 40000 = Rs. 10,176 So, required difference = 10176 - 9600 = Rs.576
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