Find the difference between simple interest and compound interest on Rs. 2,400 at 2 years at 5% per annum compounded annually.
SI =P×R×T100
SI =2400×2×5100=240
Compound interest:
Interest for first year =2400×5×1100=120
Amount after first year =2400+120=2520
Interest for second year =2520×5×1100=126
Amount after first year =2520+126=2646
Hence compound interest =2646−2400=246
Difference between CI and SI =246−240=6