Question

The simple interest for 2 years, for the same amount and for the same rate of interest is

______ than the compound interest.

(a)Less (b) same (c) greater (d) half​

Answer 1

Answer:

I think it is always less.

Answer 2

The simple interest for 2 years, for the same amount and for the same rate of interest is less than the compound interest.

• In the simple interest the principal amount of both the years will be same as the initial principal amount.
• But, in the compound interest the principal amount of the second year will be sum of the interest of first year and the initial principal amount.
• So, the interest of the second year of compound interest will be greater than the interest of the second year of simple interest.
• That's why, the total interest in simple interest will be less than the total interest of compound interest.