Question

Find the difference between the compound interest and simple interest on ₹5,000 for two years at 5% per annum​

Answer 1

✬ Difference = Rs 12.5 ✬

Step-by-step explanation:

Given:

• Principal is Rs 5000.
• Time is 2 years.
• Rate is 5 % per annum.

To Find:

• What is difference between C.I & S.I

Solution: First lets find the amount and then compound interest.

As we know that

★ Amount = Principal (1 + Rate/100)ⁿ ★

$\implies{\rm }$ A = 5000(1 + 5/100)²

$\implies{\rm }$ A = 5000(105/100)²

$\implies{\rm }$ A = 5000(11025/10000)

$\implies{\rm }$ A = 55125000/10000

$\implies{\rm }$ A = 5512.5

∴ Amount = Principal + C.I

➮ 5512.5 = 5000 + C.I

➮ 5512.5 – 5000 = C.I

➮ 512.5 = C.I

★ Simple Interest = (PRT/100) ★

$\implies{\rm }$ S.I = 5000(5)(2)/100

$\implies{\rm }$ S.I = 5000(10)/100

$\implies{\rm }$ S.I = 50000/100

$\implies{\rm }$ S.I = 500

So, Difference = C.I – S.I

➮ Difference = Rs (512.5 – 500)

➮ Rs 12.5

Answer 2

☃ Given :-

• Principal = ₹5000.

• Time = 2 years.

• Rate Per Annum = 5%.

☃ To Find :-

• Difference between C.I. and S.I.

☃ Solution :-

We know that,

Amount = Principal(1 + Rate/100)^n

Here, n = Years.

Put the values.

➨ A = 5000(1 + 5/100)²

➨ A = 5000(105/100)²

➨ A = 55125000/10000.

➨ A = ₹5512.5

C.I = Amount - Principal.

➨ C.I. = 5512.5 - 5000.

➨ C.I. = ₹512.5

Now, Calculating S.I.

S.I. = (P × R × T)/100.

➨ S.I. = (5000 × 5 × 2)/100.

➨ S.I. = ₹500.

Now, Calculating Difference.

Difference = C.I. - S.I.

➝ Difference = 512.5 - 500.

➝ Difference = 12.5.

✔ Hence, Difference = ₹12.5 ✔