Question

1. Find the difference of the compound and simple interest Rs. 46,875 at the rate of interest of 4% per annum compounded annually for 3 years. ​

Answer 1

Answer:

Solution

It is given that 

Principal= 46875 

Rate of interest = 4% p.a

(i) Interest for the first year= Prt/100

Substituting the values 

=(46875×4×1)/100

= 1875

So the amount after the first year or principal for the second year= 46875+1875=48750

Here 

Interest for the second year=(48750×4×1)/100= 1950

(ii) We know that 

Amount at the end of second year = 48750+1950

                                                     = 50700

(iii) Interest for the third year =(50700×4×1)/100=2028