Question

Find the difference between the compound interest and the simple interest on Rs.$3000$ for $2$ year at $5\%$ per annum.

Answer 1

Principal $=Rs.3000$

Rate $=5\%$

Time $=2$ years

For compound interest,

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

$A=3000{(1+\frac{5}{100})}^2$

$A=\frac{3000\times 21\times 21}{20\times 20}$

$A=Rs.3307.50$

Thus, $CI=A-P=3307.5-3000=Rs.307.50$

For Simple Interest,

$SI=\frac{PRT}{100}$

$SI=\frac{3000\times 5\times 2}{100}$

$SI=Rs.300$

Now, Difference between CI and SI = $307.5-300=Rs.7.5$