Question

Juhi got Rs.1000 as a cash prize in an essay compet
ition. She wanted to invest the
amount in the bank.Calculate simple interest and co
mpound interest at the rate of 5% per
annum for the period of 4 years. Plot the time-inte
rest graph .Find the difference in interest earned

Answer 1

simple interest=1000*4*5%100=200
Interest=Rs200
compound interest=1000*5%100=50
Interest1=Rs50
principle amount=1000+50=1050
Interest2=1050*5%100=52.5
principle amount=1050+52.5=1102.5
Interest3=1102.5*5%100=55.125
principle amount=1102.5+55.125=1157.625
interest4=1157.62*5%100=57.88
principle amount=1157.62+57.88=1215.50
total interest=1215.50-1000=215.5
difference in interest earned=215.50-200=15.50

Answer 2

P = 1000
t = 4 years
r = 5% = 0.05
n = 1

$SI = Ptr/100=1000*4*5/100=Rs.\ 200$

$A=P(1+r)^t=1000(1+0.05)^4 \\ \\ A=1000(1.05)^4=1000*1.2155=Rs.\ 1215.50$

$CI=A-P=1215.50-1000=Rs.\ 215.50$

Difference in Interest = Rs. 215.50 - Rs. 200 = Rs. 15.50

The simple interest graph will be a straight line passing through origin with slope=Pr/100=1000*5/100=50. And the compound interest graph is a exponential graph starting from origin.