Question

The simple interest on a sum of money at 4% per annum for 2 years is Rs. 80. The compound interest in the same sum for the same period is

Answer 1

Hola!

Let the Principle amnt. be = Rs. p

ATQ,

Simple Interest = p × r × t / 100

80 = p × 4 × 2 / 100

p = 80 × 100 / 2 × 4

p = 1000

So,
Principle amnt. p = Rs. 1000

now,

Compound Interest = p ( 1 + $\frac{r}{100}$ )^n

= 1000 × [ 1 + $\frac{4}{100}$ ]²

= 1000 × 26/25 × 26/25

= 1081.6

Hence,
CI = [ 1081.6 - 1000 ] = Rs. 81.6

Hope it helps! :D