Question

Find the difference between the simple interest and compound interest
2 years at 5% per annum, compound interest being reckoned annually.
3. Find the compound interest on 3125 for 3 years if the rates of interest​

Answer 1

Answer:

If the rate of interest per annum is the same under both simple interest and compound interest then for 2 years, compound interest (CI) - simple interest (SI) = Simple interest for 1 year on “Simple interest for one year”.

Step-by-step explanation:

For ,

N=3years

R=5 %

We have S.I.=

100

PNR

=Rs600

=>

100

P×3×5

=600

=>P=Rs4,000

And on interest being compounded for 2 years, Amount=P(1+

100

R

)

N

=4,000×(1+

100

5

)

3

=4,000×1.05

3

=Rs4,630.50

So, C.I.=A−P=Rs4,630.50=Rs4,000=Rs630