4. I borrowed Rs 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?
Principal,P =Rs 12000
Simple interest Rate,R = 6% p.a.
Time period,n = 2 years.
Simple Interest, SI at 6% for 2 years =
If he would have borrowed it at a compound interest Rate, R = 6% p.a.
We know, Amount when interest is compounded annually, A =
He would have to pay Rs (1483.20 - 1440) = Rs 43.20 extra.