Question

Find the difference between amounts of the simple interest and compound interest on 5000 for 20 years at the rate of 9% p.A.

Answer 1

principal = Rs. 5000

rate = 9%

time = 2years

now,

amount = p(1+r/100)^n

= 5000*109/100*109/100

= 59405/10

= 5940.5

compound interest = A-P

= 5940.5-5000

= 940.5

then,

simple interest = P*R*T/100

= 5000*9*2/100

= 900

difference = compounded interest - simple interest

= 940.5-900

= 40.5

thus, difference is 40.5