The difference between compound interest and simple interest on a sum for two years at 8% per annum, where the interest is compounded annually is Rs.16. if the interest were compounded half yearly , the difference in two interests would be nearly

For 1st year S.I =C.I.

Thus, Rs.16 is the S.I. on S.I. for 1 year, which at 8% is thus Rs.200

i.e S.I on the principal for 1 year is Rs.200

Principle =  $Rs.\frac{100*200}{8*1}$ = Rs.2500

Amount for 2 years, compounded half-yearly

  $Rs.2500*1+\frac{4}{100}4=Rs.2924.4$

C.I = Rs.424.64

Also,  $S.I=Rs.\frac{2500*8*2}{100}=Rs.400$

Hence, [(C.I) - (S.I)] = Rs. (424.64 - 400) = Rs.24.64