Question

Find the difference between the simple interest and compound interest on RS 2500 for 2 years at 4% per annum, compound interest being reckoned semi annually.

Answer 1

Answer:

SI= PRT/100

=   (2500*2*4)/100

=   20000/100

=   200

CI=

compounded half yearly

therefore, rate=4/2=2%

                 time=22=4 yrs

CI={P(1+r/100)^n) -P}

=   {2500(1+2/100)^4) - 2500)}

=   {2500 * (51/50)^4) - 2500}

=   {2500 * 6765201/6250000) - 2500}

=   2607.08 - 2500

=   206.08

Difference= 206.08-200

                 = 6.08

Hope that helps. Please mark it the Branliest.

Answer 2

Answer:

The difference between CI and SI $=206.08-200=6.08$

Step-by-step explanation:

• Simple interest is a fast and comfortable manner of computing the interest charge on a loan.
• Compound interest exists as the accumulation of interest to the principal sum of a loan or deposit, or in other phrases, interest on principal plus interest.

It is provided  that

Principal$(P)=2500$

Rate of interest $(\mathrm{r})=4 \%$ p.a. or $2 \%$half-yearly

Period$(n)=2$ years or 4 half- years

We know that

SI=Prt/100

Substituting the values

$=(2500 \times 4 \times 2) / 100$

$=200$

If compounded semi-annually

$\mathrm{A}=\mathrm{P}(1+\mathrm{r} / 100)^{\mathrm{n}}$

Substituting the values

$=2500(1+2 / 100)^{4}$

By further calculation

$&=2500 \times 51 / 50 \times 51 / 50 \times 51 / 50 \times 51 / 50$

$&=2706.08$

We know that

$\mathrm{CI}=\mathrm{A}-\mathrm{P}$

Substituting the values

$&=2706.08-2500$

$&=206.08$

So the difference between CI and SI $=206.08-200=6.08$

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