Question

find the difference between simple interest and compound interest at 5% per annum for 2 years on principal of Rs.2000​

Answer 1

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Answer 2

Answer:

The difference between compound interest and simple interest is Rs.5

Step-by-step explanation:

given,

Rate of interest per annum (R)=5%

Principle amount (P)=Rs. 2000

time period(T)= 2 years

To find simple interest:

$SI= \frac{P*T*R}{100}$

SI= 2000*2*5/100

SI= Rs. 200

Amount in the first year becomes (A1)= SI+P

A1= Rs. 2200

To find compound interest:

$CI=P*(1+\frac{R}{100} )^{T} \\CI= 2000(1+\frac{5}{100} )^{2} \\CI= 2000*(1+.05)^{2} \\CI= 2000*(1.05)^{2}$

CI=Rs. 2,205,

Let it bee A2=Rs. 2,205

The Difference amount is A2-A1 = 2205-2000

The Difference amount is Rs.5