A sum of ₹5,000 is invested for 2 years at 8% per annum. Find the difference between the compound interest and the simple interest (in ₹), if the interest is compounded annually.
₹32
For 2 years the difference between compound and simple interest is P\(\left(\frac{r}{100}\right)^2\).
= 5000 × \(\left(\frac{8}{100}\right)^2\) = 5000 × \(\frac{64}{10000}\) = 32.
Hence, the answer is ₹32.
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