The compound interest for 1st year and 2 nd year on a certain sum will be
Answers
Given : The compound interest for 1st year and 2nd year on a certain sum will be
To Find : Correct option :
Same
Different
Depend upon principle
Depend on rate of interest
Solution:
Correct option is Different
The compound interest for 1st year and 2nd year on a certain sum will be Different
Interest for 1st year will be = P(1 + R/100) - P = PR/100
Interest for 2 years will be = P(1 + R/100)² - P = 2PR/100 + PR²/100²
=> Interest for 2nd year = 2PR/100 + PR²/100² - PR/100
= PR/100 + PR²/100²
PR/100 ≠ PR/100 + PR²/100²
1st year interest ≠ 2nd year interest
Basically additional interest PR²/100² is interest over 1st year interest
(PR/100) * R * 1/100 = PR²/100²
Hence The compound interest for 1st year and 2nd year on a certain sum will be Different
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