Question

7. Find the difference between simple and compound interest on 5,600 for 2 years at 3-p.a. compounded
pounded annually​

Answer 1

Step-by-step explanation:

Compound Interest

Principle for the 1st year = 5600

Interest for the 1st year = 5,600 × 3 × 1 ÷ 100 = 168

Thus , amount at the end of first year = 5,600 + 168 = 5,768

Now , principal for the 2nd year = 5,768

Interest for the second year = 5,768 × 3 × 1 ÷ 100 = 173.04

Thus, amount at the end of second year = 5,768 + 173.04 = 5,941.04

Compound Interest = ( 5,941.04 - 5,768 ) = 173.04

Simple Interest

Principal = 5,600

Time = 2 years

Rate = 3%

S.I. = P×R×T ÷100

= 5,600 × 3 × 2 ÷ 100

= 33, 600 ÷ 100.

= 336

Simple Interest - Compound Interest

= 336 - 173.04

= 162.96

Thank you