Question

what
is the difference between
Simple interest and compound
interest for 2 years of at the rate of 5% on Rs. 1000?​

Answer 1

Answer:

-2.5

Step-by-step explanation:

Given:-

Principal $(P)=$ ₹ 1000

Rate of Interest $(R)=$ 5%

Number of years $(n)=$ 2 years

To find:-

Simple Interest (S.I) - Compound Interest (C.I)

Solution:-

$S.I=\frac{PRT}{100}$

$S.I=\frac{1000(5)(2)}{100}$

$S.I=\frac{1000(10)}{100}$

$S.I=$ ₹ 100

$Amount=P(1+\frac{R}{100})^{n}$

$Amount=1000(1+\frac{5}{100})^{2}$

$Amount=1000(1+\frac{1}{20})^{2}$

$Amount=1000(\frac{20+1}{20})^{2}$

$Amount=1000(\frac{21}{20})^{2}$

$Amount=1000(\frac{21}{20})(\frac{21}{20})$

$Amount=5(21)(\frac{21}{2})$

$Amount=$ ₹ 1102.5

$C.I=Amount-Principal$

$C.I=1102.5-1000$

$C.I=$ ₹ 102.5

$S.I-C.I=100-102.5$

$S.I-C.I=-2.5$

∴ The difference between simple interest and compound interest = -2.5.