What will be the difference in compound interest on a sum of ₹ 7,800 at 8% for 1 year, when the interest is paid yearly and half yearly?

₹ 12.48

When interest is paid yearly ,

Compound interest = Principal × ( 1 + \(\frac{rate }{100}\) )^t - Principal

 = 7800 × ( 1 + \(\frac{8 }{100}\) )¹ - 7800

= 8424 - 7800

= 624

Now ,

When interest is compounded half yearly , 

Compound interest = Principal × ( 1 + \(\frac{rate }{100}\) )^t - Principal

 = 7800 × ( 1 + \(\frac{4 }{100}\) )² - 7800

= 7800 × \(\frac{26 }{25}\) × \(\frac{26 }{25}\) - 7800

= 8436.48 - 7800

= 636.48

Required difference = 636.48 - 624

= Rs. 12.48