Imran deposits ₹7,500 at 8% per annum for 1 year. What is the difference between the compound interest (compounded annually) and the simple interest?

Explanation

1. 01

   With annual compounding, the first year's interest is 8% of ₹7,500 = ₹600 under both methods.

2. 02

   Interest on interest starts only from the second year, so the difference is ₹0.