CI − SI for 2 Years

Find the gap between compound and simple interest for 2 years instantly.

\text{CI} - \text{SI} = P\left(\dfrac{R}{100}\right)^2

1How it works

Over two years, the only extra that compound interest earns over simple interest is the interest on the first year’s interest — which equals P(R/100)².

2How to apply (in seconds)

Take the principal P and rate R.
Compute P × (R/100)².

3Worked examples

Example 1 Worked solution

Q. P = ₹10,000, R = 10% per annum, 2 years. Find CI − SI.

CI − SI = P(R/100)² = 10000 × (10/100)².
= 10000 × (1/10)².
= 10000 × 1/100.

✓ ₹100

4When to use it

✦Interest MCQs comparing CI and SI.

5Cautions & tips

!This shortcut applies to exactly 2 years.