Given:
Principal = Rs. 1200
Rate = 10% per annum
Time = 1 year
Formula used:
1. Simple Interest (SI):
SI=100PRT
Where:
SI is the Simple Interest.
P is the principal amount (the initial amount of money).
R is the rate of interest per period (usually per year).
T is the time the money is invested or borrowed for (in years).
2. Compound Interest (CI):
A=P(1+n×100R)nT
Where:
A is the amount of money accumulated after n years, including interest.
P is the principal amount (the initial amount of money).
R is the annual interest rate
n is the number of times that interest is compounded per year.
T is the time the money is invested or borrowed for (in years).
3. Compound Interest = Amount - Principal
Calculation:
Case 1: Simple Interest:
⇒ S.I = 1001200×10×1 = Rs. 120
Case 2: Compound Interest:
Since the interest is compounded half-yearly,
Therefore,
n = 2
Now,
⇒ A=1200×(1+2×10010)2×1
⇒ A=1200×(1+201)2
⇒ A=1200×(2021)2 = Rs. 1323
Now, C.I = Rs. 1323 - Rs. 1200 = Rs. 123
Now, the required difference = Rs. 123 - Rs. 120 = Rs. 3
Therefore, "Rs. 3" is the required answer.