The difference between the simple interest and compound interest on ₹1,000 for 1 year at 20% per annum, compounded half-yearly, is:

₹ 10

The Formula that we used here is -

C. I.= P$(1 \;+\; \frac{R}{100})^t$ - P

Interest is compounded half yearly,

New rate = \(\frac{20}{2}\)% = 10%

 = 1000 [ 1 + \(\frac{10}{100}\)]² - 1000

 = 1000  × \(\frac{11}{10}\)  × \(\frac{11}{10}\) - 1000

= 1000 [ \(\frac{21}{100}\) ]

= 210

ATQ,

Simple interest = \(\frac{P × R × T}{100}\)

= \(\frac{1000 × 20 × 2}{100}\)

= 200

Required difference = 210 - 200 = Rs.10