Question

A person earns an interest of rs 480 on investing certain amount at simple interest for 2 years at 5 percent per annum. If the rate of interest is compounded annually then how much more interest will be gained by the person at same rate of interest and on the same sum?

Answer 1

Step-by-step explanation:

Let Principal =100

2yr×5%=10%

Here

10%=480

100%=4800

Now

Compounded annually

1st year =480

2nd year =480+10%of480=480+48=1008

Difference if interest =1008-480=528