Question

Calculate the difference between CI and ST on
2 20000 in 3 years at 8%P a with explan​

Answer 1

Explanation,

Given,

• Principal (P) = Rs. 220000
• Time (t) = 3 years
• Rate of interest (R) = 8%

To Find,

• The difference between CI and SI.

Solution,

Applying compound interest formula,

CI = [ P(1 + R/100)^t - P ]

[ Put the values ]

⇒ CI = [ 220000(1 + 8/100)³ - 220000 ]

⇒ CI = [ 220000(100 + 8/100)³ - 220000 ]

⇒ CI = [ 220000(108/100)³ - 220000 ]

⇒ CI = [ 220000 × 108/100 × 108/100 × 108/100 - 220000 ]

⇒ CI = [ 22 × 108 × 108 × 1.08 - 220000 ]

⇒ CI = [ 277136.64 - 220000 ]

⇒ CI = Rs. 57136.64

Applying simple interest formula,

S.I = P × R × t / 100

[ Put the values ]

⇒ SI = 220000 × 8 × 3 / 100

⇒ SI = 2200 × 24

⇒ SI = Rs. 52800

Now,

Difference = CI - SI

[ Put the values ]

⇒ Difference = 57136.64 - 52800

⇒ Difference = Rs. 4336.64

Therefore,

The difference between CI and SI is Rs. 4336.64.