Question

If the simple interest on a sum for 2 years at
10% pa is 1000 and the same amount is
borrowed for 2 years at 8% pa and
compounded annually, then find the
compound interest and the amount to be paid
after 2 years​

Answer 1

Answer:

If the simple interest on a sum for 2 years at

10% pa is 1000

SI = PRT/100 = 1000*2*10/100 = 200

Calculate:

Total P+I (A)

Where: A = P(1 + r/n)^(nt)

Principal (P): $

1,000.00

Rate (R): % annual 8

Compound (n): Compounding Annually (1/Yr)

Time (t in years): 2

Answer:

A = $ 1,166.40

A = P + I where

P (principal) = $ 1,000.00

I (interest) = $ 166.40