Question
A man deposited Rs. 10000 at 10% compound interest,
compounded annually while Rs. 8900 at 13% simple interest per annum. What will be the difference between the compound interest and the simple interest earned by him after 3 years?Solution
Compound interest earned by the man in 3 years = 10000 × {(1 + 10/100)3 – 1)} = 10000 × 0.331 = Rs. 3310 Simple interest earned by the man in 3 years = 8900 × 0.13 × 3 = Rs. 3471 Required difference = 3471 - 3310 = Rs. 161
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