Question

The simple interest at 5% got for a certain amount after 2 years is 200 rupees If interest is compounded annually, what would the interest for same amount at the same end after 2 years ?

pls explain ​​

Answer 1

Answer:

The principal that produces 200 rupees interest in 2 years@ simple interest of 5% is 2000 rupees (p×t×r)p×2×0.05=200)

p×0.1=200

p=200/0.1= 2000rupees.

Now at compounded 5%interest rate:2000(1+r)^2 =2000(1.05)^2=2000×1.1025

=2205rupees.

Answer:2205–2000=205 rupees