Question

what is the difference of simple profit and compound profit of tk.8000 in 3 years@of 5 % profit per annum?​

Answer 1

Given :

The principal = p = Rs 8000

The time period = t = 3 years

The rate of interest = r = 5%

To Find :

The Difference between Simple interest and compound interest

Solution :

From Simple Interest

Simple Interest = $\dfrac{principal\times rate\times time}{100}$

Or, S.I = $\dfrac{Rs 8000\times 5\times 3}{100}$

Or, S.I = Rs 1200

So, Interest at S.I = Rs 1200

Again

From Compound Interest

Amount = Principal × $(1+\dfrac{rate}{100})^{time}$

or,  A = Rs 8000 × $(1+\dfrac{5}{100})^{3}$

or,  A = Rs 8000 × ( 1.05 )³

or,  A = Rs 8000 × 1.157

∴     Amount = Rs 9256

So, Interest = Amount - Principal

                   = Rs 9256 - Rs 8000

                   = Rs 1256

So, Interest at C.I = Rs 1256

∴ Difference = Profit at C.I - Profit at S.I

                    = Rs 1256 - Rs 1200

                    = Rs 56

So, The difference = Rs 56

Hence, The Difference of simple profit and compound profit is Rs 56 Answer