Question

Simple interest on a sum of money for $2$ years at $4$% is Rs. $450$. Find compound interest on the same and at the same rate for $2$ years.

Answer 1

For ,
$N=2$ years
$R=4$ %
We have $S.I.=\frac{PNR}{100}=Rs450$
$=>\frac{P\times 2\times 4}{100}=450$
$=>P=Rs.5,625$
And on interest being compounded for 2 years, $Amount=P{(1+\frac{R}{100})}^N=5,625\times {(1+\frac{4}{100})}^2=5,625\times {1.04}^2=Rs.6,084$
So, $C.I.=A-P=Rs.6,084=Rs.5,625=Rs.459$