What is the difference (in ₹, to the nearest rupee) between the simple interest and compound interest on ₹24,500 in two years at the rate of 8% per annum? The compound interest is compounded annually.

The difference between compound interest (CI) and simple interest (SI) for a period of 2 years is given by the formula:
Difference=P(
100
R
​
)
2

Where:

P=₹24,500 (Principal)

R=8% (Rate of interest per annum)

Substitute the values into the formula:

Difference=24500×(
100
8
​
)
2

Difference=24500×
10000
64
​

Difference=
100
245×64
​
=
100
15680
​
=156.8≈157
To the nearest rupee, the difference is ₹157.