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Find the difference between CI and SI on Rs.32, 000 at $12\% p.a$ for $3$years.

Last updated date: 28th May 2024
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Hint: Proceed the solution by using Simple interest and Compound interest formula.
According given data,
Principal (P) = Rs.32, 000
Rate (R) =$12\% p.a$
Time (T) = $3$years
Now let us get the simple interest value by using the formula of S.I
Simple interest (S.I) = $P \times T \times R$
On substituting P, T, R value in the above formula we get
S.I=$32,000 \times \dfrac{{12}}{{100}} \times 3$
Now let us find Compound interest (C.I) value, for finding C.I we have to find the Amount.
Amount=$P{(1 + R \div 100)^n}$ [Here n is the no. of year (Time (T))]
Amount=$32,000{(1 + 12 \div 100)^3}$
Therefore Amount=$44928$
We know that Compound interest=Amount-Principal
So, Compound interest =$44928 - 32000$
Therefore Compound interest (C.I) =$12928$
Now, the difference between Compound interest and Simple interest is
Difference=$C.I - S.I$
Difference =$12928 - 11520$
$\therefore $Difference between $C.I - S.I$=Rs.1408
NOTE: Here Simplification of formula is crucial. Here before finding the Compound interest we have found the amount which is not given in the problem.