The simple interest on a certain sum of money at rate of interest 5% per annum for 2 years is Rs. 500. What is the compound interest on the same sum for the same period and at the same rate of interest?
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Answer:
5000
Step-by-step explanation:
5% interest for 2 years is rs. 500
e.i. 5% interest of one year is rs. 250
(250×100)/5 = rs. 5000
compound interest for 2 years,
1 year: 5% × 5000
=250
rs. 5250 is the principal after 1 year
2nd year: 5% × 5250
= 262.5
rs. 5512.5
compound interest is 5512.5 - 5000 = 512.5
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