Question

derive simple interest and compound interest formulas and give an example for every problem

Answer 1

Answer:

Step-by-step explanation:

If the difference between compound and simple interest is of two years than,

Difference = P(R)²/(100)²

Where P = principal amount, R = rate of interest

If the difference between compound and simple interest is of three years than,

Difference = 3 x P(R)²/(100)² + P (R/100)³.

Here also, P = principal amount, R = rate of interest

Simple interest (SI)

This is one of the interest forms, when interest is calculated only on the principal and calculating uniformly through the intervals then the interest is called simple interest.

Simple Interest= pnr/100

Where p = principal

n = number of periods

r = rate of interest

Amount under SI = P + I

= P + pnr/100

=P [1 + nr/100 ]

Amount at the end of nth year under Simple Interest = P [1 + nr/100 ]