Find the difference between C.I. and S.I. on sum of 4800 for 2 years at 5% per annum payable yearly.
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Answer:
It is given that
Principal (P) = 4800
Rate of interest (r) = 5% p.a.
Period (n) = 2 years
We know that
SI = Prt/100
Substituting the values
=(4800×5×2)/100
= 480
If compounded yearly
A= P(1+r/100)
n
Substituting the values
=4800(1+5/100)
2
By further calculation
=4800×21/20×21/20
= 5292
Here
CI = A - P
Substituting the values
= 5292 - 4800
= 492
So the difference between CI and SI = 492 - 480 = 12
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