Question

Shankar text Salon of rupees 10000 at a compound interest rate of 10% per annum find the difference between the compound interest and simple interest at the same rate for 2 years

Answer 1

P=Principal,R=Rate,T=Time,I=Interest

Compound Interest:
For 1st Year
P=Rs.10000
R=10% p.a.
T=1

I=P×R×T/100
=10000×10×1/100
=Rs.1000
Amount=10000+1000
=Rs.11000
For 2nd year
P=Rs.11000
R=10%
T=1 year
I=P×R×T/100
=11000×10×1/100
=Rs.1100
Final Amount=11000+1100
Rs.12100
Compund Interest=Final Amount-Original Principal
=Rs.12100-Rs.10000
=Rs.2100

Simple Interest:
P=Rs.10000
R=10% p.a.
T=2 years
I=P×R×T/100
=10000×10×2/100
=Rs.2000

Difference:
Compound Interest-Simple Interest
Rs.2100-Rs.2000
Rs.100 (Answer)