Question

Find the difference between the compound interest and simple interest on Rs $5,000$ for two years at 9% per annum.

Answer 1

We know,

$S.I=\frac{P\times R\times T}{100}$

$=\frac{5000\times 9\times 2}{100}$

$=900Rs.$

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

$=5000{(1+\frac{9}{100})}^2$

$A=Rs.5940.5$

$C.I.=A-P=5940.5-5000$

$=940.5$

Difference$=C.I-S.I$

$=940.5-900$

$=40.5Rs.$