Question

7. Which investment is better and by how much? (i) 12000 at 6% p.a. simple interest for 2 years. ii) 12000 at 6% p.a. compound interest for 2 years.​
solv)12000(1+6/100)2-12000 so how it is 12000(53/50)2-12000

Answer 1

Answer:

Interest when paid as Simple Interest

S.I. = 100(P×R×T)

S.I. = 10012000×6×2

S.I. =Rs1440

Interest paid when compounded

Amount=Principal(1+100R)Time

Amount=12000(1+1006)2

Amount=13483.20

Interest = 13483.20−12000=Rs1483.20

If compounded annually more Interest paid = 1483.20−1440=Rs43.20

Rounding off to its nearest integer=43 Rs

I hope it help you...