Question

Ramu deposited 1000 rupees in a bank which gives 10%simple interest. Venu deposited 1000 rupees in another bank which gives 10% interest compounded annually

a) what amount Ramu will get back after 2 years?

b) what amount Venu will get back after 2 years?

Answer 1

Hey there,

◆ Answer-
a) Ramu will get back 1200 Rs.
b) Venu will get back 1210 Rs.

◆ Explanation-
a) For Ramu,
Here the interest is simple interest.
Total interest = principal × rate of interest × time
Total interest = 1000 × 10% × 2 = 200 Rs.

Total amount received = Principal + interest
Total amount received = 1000 + 200
Total amount received = 1200 Rs.

b) For Venu,
Here interest is compound interest.
Interest after 1st year = principal × rate of interest
1st year interest = 1000 × 10% = 100 Rs.
Interest after 2nd year = principal × rate of interest
2nd year interest = 1100 × 10% = 110 Rs.

Total amount received = Principal + interest
Total amount received = 1000 + 100 + 110
Total amount received = 1210 Rs.

Hope that is helpful...