Question

What will be ratio of simple to compound interest on two same sums invested in sbi at rate of interest of 8% kept for 3 years?

Answer 1

The ratio of SI and CI on the amount would be 12:!3

1) Let the amount invested be Rs x

2) Given rate of interest = 8%

Time period  = 3 years

3) SI secured in the given time would be

SI = PRT/100 =  (8*3*x )/100 = 0.24 x

4) CI secured in the given time would be

CI = P((1+r/100)^T -1)

= x((1+8/100)^3 - 1)

= x(1.2597 -1)

= 0.2597x = 0.26x

5) The ratio of SI and CI would be

0.24x:0.26x = 12:13