What is the difference between simple and compound interest at 10% per annum on a sum of Tk. 6000 at the end of 2 years?


A

Tk. 120


B

Tk. 90


C

Tk. 60


D

Tk. 75


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Question: What is the difference between simple and compound interest at 10% per annum on a sum of Tk. 6000 at the end of 2 years?

Solution:
Principal (P) = Tk. 6000
Rate (r) = 10% per annum
Time (n) = 2 years

Simple Interest (SI):
SI = (P × R × T)/100
= (6000 × 10 × 2)/100
= 120000/100
= Tk. 1200

Compound Interest (CI):
Amount (A) = P × (1 + r/100)n
= 6000 × (1 + 10/100)2
= 6000 × (1.1)2
= 6000 × 1.21
= Tk. 7260

∴ CI = A - P = 7260 - 6000
= Tk. 1260

∴ Difference between CI and SI = 1260 - 1200
= Tk. 60

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Updated: 1 month ago

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