Question

8. The simple interest on a certain sum of money for 2 years at 41/2% per annum is rupees 5400. What will be the compound interest on that sum at the same rate for the same time period if the interest is compounded annually. und interest on nunees 2500 at 16% per​

Answer 1

Formulae:

Simple Interest = PRT/100

Compound Interest = P(1+R/100)ⁿ - P

Given:

Time (T) = 2

Rate (R) = 41/2

Simple Interest  = 5400

Therefore, P = 5400/(41/2)*2/100 = 13170.73

Now the same money if compounded annually, at same rate,

Compound Interest = 13170.73(1+ 41/200)² - 13170.73 = 5953.5