Question

find the difference between simple and compound interest on rs 5000 at 7% for 2 years ​

Answer 1

1st compounded annualy (compound interest)

1ST YEAR

CI=5000×7×1

---------------

100

=350

AMOUNT= 5000+350

=5350rs

2ND YEAR

CI=5350×7×1

----------------

100

=374.5

AMOUNT=5350+374.5

= 5724.5

now by simple interest

SI=5000×7×2

---------------

100

= 700

AMOUNT=5000+700

=5700

THE DIFFERENCE BETWEEN THE INTERESTS WILL BE

5724.5

-5700.0

--------------

24.5