Find the different between the compound interest and simple interest on a sum of $64000 for 2 year at the 7,one and half% pa.
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Step-by-step explanation:
Given Principal =64000.
Rate of interest = 20% P.A.
n = 2.5 years.
We know that A = P(1 + r/100)^n
When the interest is compounded semi-annually.
A = P(1 + r/200)^2n
= 64000(1 + 20/200)^2×2.5
= 64000(11/10)^5
= 64000 * 1.610
= 103072.6
We know that CI = A - P
= 103072.6 - 64000
= 39072.6
We know that SI = PRT/100
When semi annually
simple interest=PRT/2×100
T is taken as 2.5×2=5
= 64000 * 20 * 5/100 * 2
= 64000 * 100/200
= 32000
Difference between Simple Intrest and Compound Intrest = 39072.6 - 32000
= 7072.6
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