*What is the difference between simple and compound interest on Rs. 42000 at 5% rate for 2 years?*
1️⃣ Rs.105
2️⃣ Rs. 100
3️⃣ Rs. 205
4️⃣ Rs. 200
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The difference between the compound interest and the simple interest on Rs.42000 for two years is Rs.105 at the same rate of interest per annum. Find
(i) the rate of interest
(ii) the compound interest earned in second year.
Answer
P = Rs 42000 T=2 years
Let rate = r %
S.I=
100
PRT
=
100
42000×r×2
=840 Rs
For C.I
A=P(1+
100
r
)
n
=42000(1+
100
r
)
2
=42000(1+
10000
r
2
+
50
r
)
=42000+
10
42r
2
+840r
C.I = A - P
=42000+
10
42r
2
+840r−42000
=
10
42r
2
+840r
Given C.I−S.I=105
=
10
42r
2
+840r−840r=105
=
10
42r
2
=105
=42r
2
=1050
=r
2
=25
r=5%
C.I at 2nd year = 42000(1+
100
5
)
2
−42000
=42000(1.1025−1)=4305 Rs
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