I borrowed ₹ 12,000 from Jamshed at 6%per annum simple interest for 2years. Had I borrowed this sum at 6% per annum compound interest, extra amount would I have to pay is ____.

Question

I borrowed ₹ 12,000 from Jamshed at 6%per annum simple interest for 2years. Had I borrowed this sum at 6% per annum compound interest, extra amount would I have to pay is ____.

Accepted Answer

Concept: The extra amount needed to be paid would be Rs. 43.20. For a principal of Rs. 12,000, a rate of 6%, and a time period of two years, we shall calculate simple interest. We will also finish the payment. The amount needed for the compound interest formula will then be determined.
By using simple interest (SI) =

\frac{p \times r \times t}{100}

And amount =SI+P=SI+P
Amount =P(1+

\frac{r}{100}

) T
Here, P ==Principal sum
R== Rate of interest
T==Time
Here P== ₹ 12,000
R=6%
T=2years
(SI) =

\frac{p \times r \times t}{100}

.........(i)
We will substitute the value of P, R and T in the equation (i) , we have
SI =

\frac{12000 \times 6 \times 2}{100}

SI =120×6×2=120×6×2
SI =12×120=12×120
SI =1440=1440
Now, Amount =SI+P=SI+P
Amount == ₹ 1440+12,000
Amount == ₹ 13440.00
t, we have
Amount =P(1+

\frac{r}{100}

) T
We will put the value of P, R and T in above formula, we have
Amount =12000(1+

\frac{6}{100}

) 2
Amount =12000(1+

\frac{3}{50}

) 2
Amount =12000(50+

\frac{3}{50}

) 2
Amount =12000×(

\frac{53}{50}

) 2
Amount =12000×

\frac{53}{50}

×

\frac{53}{50}

Amount =120×

\frac{53}{5}

×

\frac{53}{5}

Amount =24×53×

\frac{53}{5}

Amount =24×

\frac{2809}{5}

Amount =

\frac{67416}{5}

Amount =13,483.20
∴By using simple interest amount ==₹ 13440.00
And by using compound interest amount ==₹ 13483.20
Extra amount ==compound interest amount −−simple interest amount
Extra amount ==₹ 13483.20−13440.00
Extra amount ==₹ 43.20
Hence, the answer is Rs. 43.20

I borrowed ₹ 12,000 from Jamshed at 6%per annum simple interest for 2years. Had I borrowed this sum at 6% per annum compound interest, extra amount would I have to pay is ____.

Best Courses for You

Detailed Solution

courses

Get Expert Academic Guidance – Connect with a Counselor Today!

best study material, now at your finger tips!

download the app

Download the App