Question

The compound interest for a sum of money for 2 years at the rate of 5% p.a. compounded annually i
410. Find the simple interest on the same sum for the same time period at the same rate of interest.
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Answer 1

Answer:

The Simple interest for the same sum for the same time period at the same rate of interest is 37.1882.

​Step-by-step explanation:

The formula to compound interest is:

$CI=P[1+\frac{r}{100}]^{t}$

Given:

Compound Interest (CI) = 410, interest rate (r) = 5% p.a. and time (t) = 2 years.

Determine the principal (P) as follows:

$CI=P[1+\frac{r}{100}]^{t}\\410=P[1+\frac{5}{100}]^{2}\\P=\frac{410}{1.1025}\\ P=371.882$

The principal is 371.882.

The simple interest formula is:

$SI=\frac{P\times r\times t}{100}$

Compute the simple interest for the sum P = 371.882, r = 5% and t = 2 years as follows:

$SI=\frac{P\times r\times t}{100}\\=\frac{371.882\times5\times2}{100}\\ =37.1882$

Thus, the simple interest is 37.1882.