Question

3. Find the difference between the simple interest and the compound interest at 5% per annum for 2 years on principal of Rs. 2000?​

Answer 1

Step-by-step explanation:

Difference between C.I and S.I is

C.I - S.I = 5

Step-by-step explanation:

Here given that

Principal ( P) = Rs. 2000

Rate of interest ( I ) = 5%

Time period (T) = 2 years

Now, first using Simple Interest formula

S.I = (P * I * T) / 100

    = ( 2000*5*2) / 100

S.I = Rs. 200

Now, using Compound Interest formula

C.I = P [(1+I/100)^T - 1]

     = 2000 [(1 + 5/100)^2 -1]

     = 2000 [(1 + 1/20)^2 - 1]

     = 2000 [(21/20)^2 - 1 ]

     = 2000 [(441/400) - 1 ]

     = 2000 [ (441-400)/400 ]

     = 2000 (41/400)

   Dividing by 400 . We get,

C.I  = Rs. 205

Difference between C.I and S.I is

C.I - S.I = 205 - 200

            = 5

Hence, A option (5) is  the answer.