What is the difference (in Rs.) in compound interest earned in 1 year on a sum of Rs. 25,000 at 20% per annum compounded semi-annually and annually?

Using the annual compound interest formula, the amount is 25000 multiplied by 1.2, resulting in Rs. 30,000 and an interest of Rs. 5,000. When compounded semi-annually, the rate becomes 10% per half-year, so the amount is 25000 multiplied by 1.1 squared, which equals Rs. 30,250 and yields an interest of Rs. 5,250. The difference between the two interests is 5250 minus 5000, equaling Rs. 250. The difference in the compound interest is Rs. 250.

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