Question

7
Calculate the simple and compound interest at 5% annual rate on Rs. 1,260/- after
2 years?
Find the difference between the amount of compound interest and simple interest​

Answer 1

Answer

Principal = Rs 1260

Rate of interest = 5%

Time. = 2 years

SI = I×R×T = 1260×5×2 = Rs 126

100. 100

Amount:- Principal+ Interest = 1260+ 126 = Rs 1386

For the first year, P = 1260 and R= 5%

So, I = P×R×T = 1260×5×1 = Rs 61

100. 100.

A= 1260+61 = Rs 1321

For the second year, P = Rs 1321 and. Rate = 5%

So, I = P×R×T = 1321×5×1. = Rs 66.05

100. 100

A = 1321+ 66.05 = Rs 1387.05

CI = Amount - Original principal

= 1387.05 - 1260.00

= Rs 127.05

Compound Interest amount is greater than Simple Interest amount by = Rs 1387.05

- Rs 1386.00

Rs 0001.05