Simple interest on a sum of money for 2 years at 612% per annum is Rs. 5200. What will be the compound interest on the sum at the same rate for the same period?
In first case,
S.I = Rs. 5200
Rate (R) =612%=132%
Period (T) = 2 years
∴ Principal =Rs.S.I×100R×T=5200×100×213×2
=Rs.40000
In second case,
Principal (P) = Rs. 40,000
Rate (R) =132% p.a
Period (n) = 2 years
∴ Amount =P(1+R100)n
=Rs.40,000(1+132×100)2
=Rs.40000(213200)2
=Rs.40000×213200×213200=Rs.45,369
∴ Compound interest = A - P
Rs. 45369 - Rs. 40,000 = Rs. 5369