The difference between simple interest and co | vedclass

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(C) The formula for the difference between compound interest $(CI)$ and simple interest $(SI)$ for $2$ years is given by:$CI - SI = P \left( \frac{R}{

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$2$

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(C) The formula for the difference between compound interest $(CI)$ and simple interest $(SI)$ for $2$ years is given by:$CI - SI = P \left( \frac{R}{100} ight)^2$Given:Principal $(P)$ = ₹ $1250$Rate $(R)$ = $4 \%$Time $(n)$ = $2$ yearsSubstituting the values into the formula:$CI - SI = 1250 	imes \left( \frac{4}{100} ight)^2$$CI - SI = 1250 	imes \left( \frac{1}{25} ight)^2$$CI - SI = 1250 	imes \frac{1}{625}$$CI - SI = 2$Therefore,the difference is ₹ $2$.

The difference between simple interest and compound interest (in ₹) on ₹ $1250$ for $2$ years at $4 \%$ $p.a.$ is

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