Question

4. Find the difference between the simple interest and compound interest on 20,000 for 2 years at
6% per annum, compound interest being reckoned semi-annually.
TT​

Answer 1

Answer:

first we will take out the SI on principle 20,000 for 2 years at 6% rate..

So,

SI= P×R×T/100

SI=20,000×6×2/100

SI=24,00

Now,CI on semi annualy..

For CI first we will take out the amount.

So..

P=20,000

R=6%=6/2=3%

T=2yrs..=2×2=4yrs.

now,

A= p(1+r/100)^n

A=20,000(1+3/100)^4

A= 20,000(100+3/100)^4

A=20,000(103/100)^4

A=20,000×103/100×103/100×103/100×103/100

A=22,510.17

now,CI

CI=A-P

CI=22,510.17-20,000

CI=2510.17

now,difference between SI and CI

Difference=CI-SI

difference=2510.17-2400

difference=110.17