Question

find the difference between the simple interest and compound interest on 2500 for 2 years at 10% pa
compound annualy

Answer 1

Answer:

here, principal (p)=2500

rate (r)=10 percent per year

time (t)=2 years

case1

we know that, compound interest =p((1+r/100)^t-1)

2500((1+10/100)^2-1)

2500(1.21-1)

2500×0.21

=Rs.525

case2

simple interest =p×t×r/100

=2500×2×10/100

=500

difference between compound interest and simple interest

=525-500

=Rs.25