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Find the Difference Between the Compound Interest and the Simple Interest in 2 Years on Rs 5,000 at 8% P.A. Compounded Annually. - Mathematics

Sum

Find the difference between the compound interest and the simple interest in 2 years on Rs 5,000 at 8% p.a. compounded annually.

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Solution

Here P = Rs 5000 · r = 8 %  t = 2years 

For simple interest: 

S.I. = `("P" xx "r" xx "t")/100`

S.I. = Rs `(5000 xx 8 xx 2)/100`

S.I. = Rs 800

For compound interest: 

`"A" = "P" (1 + "r"/100)^"n"`

A = Rs 5000 `(1 + 8/100)^2`

A = Rs `5000 xx 108/100 xx 108/100`

A= Rs 5,832 

C.l. = A - P

C.l. = Rs (5832 -5,000)

C.l. = Rs 832 
The difference in the compound interest and the simple interest

= Rs (832 - 800)

= Rs 32. 

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APPEARS IN

Frank ICSE Class 10 Mathematics Part 2
Chapter 1 Compound Interest
Exercise 1.4 | Q 7 | Page 13
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