Question

what is the difference between the maturity value, of rs 12500 is invested for 2 years at 20 percent per annum simple interest and Compound interest?​

Answer 1

Answer:

500

Step-by-step explanation:

SI = PTR /100 = 12500 * 2 *20 /100 = 5000

CI = P[(1+ R/100)^T-1] = 12500[(1+20/100)^2 - 1 ]

   = 12500 [(36/25)-1] = 12500 * 11/25 = 5500

CI - SI = 5500-5000 = 500

or

Short trick:

difference = S.I*R /200 (this formula is applicable for 2 years only)

                = 5000 * 20/200 = 500