Question

Find difference between simple interest and compound interest on rupees 5000 for 2 year at 9% per annum

Answer 1

S.I for 2 years = P*R*T/100 = 5000*9*2/100 = 900

C.I for 1st year = P*R*T/100 = 5000*9*1/100 = 450
A= P + C.I = 5450
This becomes P for 2nd year
C.I for second year = 5450*1*9/100 = 490.5
Hence, C.I for 2 years = 450 + 490.5 = 940.5

Hence C.I - S.I = 940.5 - 900 = 40.5 Rs.