What is the difference between the compound interest and the simple interest on ₹12,200 for 2 years at 10% per year?

💡 Solution & Explanation

For 2 years, compound interest is more than simple interest only because of the interest on the first year's interest. That extra = principal × (rate/100)² = 12,200 × (10/100)² = ₹122. You can check by working out both: simple interest is ₹2,440 and compound interest is ₹2,562.