Question

Wht is the difference between simple and compound interest at 5% per annum for 2 yrs on a principal of rs.2000

Answer 1

The difference between compound interest and simple interest over two years is given by  

Pr2/1002 or P(r/100)2

Here, Principal (P) = Rs. 2000

Rate (r) = 5%

Now difference, D = (2000*5*5)/(100*100)

D = Rs. 5.