find the distance between the simple interest and the compound interest and the compound interest on Rs 5000 for 2 years at 6% per annum
Answers
» Question :
Find the distance between the Simple Interest and the Compound Interest on ₹ 5000 for 2 years at 6% per annum.
» To Find :
The difference between the Simple Interest and the Compound Interest.
» Given :
- Principal = ₹ 5000
- Time = 3 years
- Rate = 6% p.a.
» We Know :
Formula for Simple Interest :
Where,
- P = Principal
- R = Rate
- t = Time
- SI = Simple Interest
Formula for Compound Interest :
Formula for Amount :
Where,
- P = Principal
- A = Amount
- R = Rate
- n = time period
» Concept :
To Find the difference between the Simple Interest and the Compound Interest , first we have to find the Individual simple and compound interest .
And then by subtracting them with each other ,we can find the difference between them.
» Solution :
Simple Interest :
We Know,
- Principal = ₹ 5000
- Time = 3 years
- Rate = 6% p.a.
Formula :
Putting the value in the formula , we get :
Hence, the simple interest is ₹ 600.
Compound interest :
Amount :
We Know :
- Principal = ₹ 5000
- Time = 3 years
- Rate = 6% p.a.
Formula :
Putting the value in the formula , we get :
Hence ,the amount is ₹5618.
Compound interest :
Formula :
Putting the value in the formula ,we get :
Hence the CI is ₹618.
Difference between the Simple Interest and the Compound Interest:
- Simple Interest = ₹600
- Compound Interest = ₹618
Difference = Compound Interest - Simple Interest
Hence the difference between the Simple Interest and the Compound Interest is ₹18.
Additional information :
- Amount = Principal + Simple Interest
Where ,
P = Principal
A = Amount
R = Rate
t = time
SI = Simple Interest
Given :
- principal = 5000
- time period = 2 years
- rate = 6 % per annum
To Find:
- simple interest
- compound interest
- difference between simple and compound interest
Formula :
here ,
- SI = simple interest
- P = principal
- R = rate
- n= t = time period
- A = amount
- CI = compound interest
Solution :
Step 1 : Find simple interest
here ,
- P = Rs 5000
- R = 6 %
- t = 2 years
_______________________________
Step 2 : Find Amount
here ,
- P = Rs 5000
- R = 6 %
- n = t = 2
________________________________
Step 3 : Find the compound interest
here ,
- A = Rs 5618
- P = Rs 5000
________________________________
Step 4: Find the difference between compound interest and simple interest
= 618 - 600
= Rs 18
Difference between compound interest and simple interest is Rs 18