Difference between Simple Interest and Compound Interest
The following table gives the difference of SI and CI on a principal of Rs. 10,000 at 10% per annum for three years
At the end ofâ€¦  Amount (with SI)  SI  Compound Interest  Amount 
1^{st} year  11,000  1,000  1,000  11,000 
2^{nd} year  12,100  1,000  1,100  12,100 
3^{rd} year  13,310  1,000  1,210  13,310 
The difference between SI and CI is the interest on interest. In the first case, the interest does not earn anything, while in the second case the interest is added to the principal for purposes of interest calculation. To solve SI and CI sums, one should try to work on the difference and calculate interest on interest.
Note that the SI and CI are the same in the first year and changes only in subsequent years.
The difference between six monthly and quarterly compounding is given in the following table. The principal is Rs 10,000 and the interest rate is 12%. It is compounded six monthly in the first case and quarterly in the second case. The period is one year.
Six monthly compounding Interest Quarterly Compounding 
At the end of: 
Interest 
Amount 

Interest 
Amount 
Ist Quarter 
Nil 
10,000 

300 
10,300 
IInd Quarter 
600 
10,600 

309 
10,609 
IIIrd Quarter 
Nil 
10,600 

318.27 
10,927.27 
IVth Quarter 
636 
11,236 

327.81 
11,255.08 