Calculate the difference between the compound interest and simple

interest on ₹20,000 in 2 years at 8% per annum.

Answer: ₹128

Step-by-step explanation:

To work out the simple interest, you need to work out 8% of ₹20,000 for 2 years, which is 1.08 * ₹20,000 = ₹21,600 in the first year and ₹23,200 in the second year

To work out the compound interest, you need to work out 8% of the new value

1st year: ₹21,600

2nd year: 8% of ₹21,600 = ₹23,328

The difference is ₹23,328 - ₹23,200 = ₹128