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Amount = Principal x {1 + (Rate/100)}T Interest earned when interest is compounded annually = 75000 x 1.12 - 75000 = Rs. 9,000 When compounding semi-annually: Rate of interest = 12 ÷ 2 = 6% p.a. And, effective terms = 2 terms, where each term consist of 6 months So, Interest earned when interest is compounded semi-annually = 75000 X 1.062 - 75000 = Rs. 9,270 So, required difference = 9270 - 9000 = Rs. 270
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