CameraIcon
CameraIcon
SearchIcon
MyQuestionIcon


Question

Find the difference between the simple interest and compound interest on $$Rs\  4800$$ for $$2$$ years at $$5\%$$ per annum, compound interest being reckoned annually.


Solution

Simple Interest:
$$P=Rs\ 4800$$                 $$r=5\%  p.a$$                        $$t=2\ years$$
$$\therefore SI=\dfrac{Ptr}{100}=Rs.\dfrac{4800\times 2\times 5}{100}=Rs\ 480$$

Compound interest:
Case I 
$$P=Rs\ 4800$$                 $$r=5\%  p.a.$$                $$t=1\ year$$
Interest $$=Rs.\dfrac{4800\times 5\times 1}{100}=Rs\ 240$$
$$\therefore A=Rs\ (4800+240)=Rs\ 5040$$
Case II 
$$P=Rs\ 5040$$           $$r=5\% p.a.$$                   $$t=1\ year$$
Interest $$=Rs.\dfrac{5040\times 5\times 1}{100}=Rs\ 252.$$
$$\therefore A=Rs\ (5040+252)=Rs\ 5292$$.
$$\therefore$$ Compound Interest $$=Rs(5292-4800)=Rs\ 492$$
$$\therefore$$ Difference between compound Interest and Simple Interest $$=Rs\ (492-480)=Rs.12$$          

Mathematics

Suggest Corrections
thumbs-up
 
0


similar_icon
Similar questions
View More


similar_icon
People also searched for
View More



footer-image