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Question -

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



Answer -

Given: P = ₹ 12,000, R = 6% p.a., n = 2 years


Difference between two interests = ₹ 1483.20 – ₹ 1440 = ₹ 43.20
Hence, the extra amount to be paid = ₹ 43.20

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