What is the difference between simple interest and compound interest on ₹ 10,000 for two years at 20% per annum compounded half-yearly?

Explanation

Simple Interest for 2 years is 10000 \times 20\% \times 2 = 4000. For compound interest half-yearly, rate is 10\% per period for 4 periods. \text{CI} = 10000 \times ((1.1)^4 - 1) = 10000 \times 0.4641 = 4641. The difference is 4641 - 4000 = 641.

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