Find the difference between the simple interest and the compound interest at 5% per annum for 2 years on principal of Rs. 2000.
A. 5
B. 10.5
C. 4.5
D. 5.5
E. None of these
Answer: Option A
Solution(By Examveda Team)
$$\eqalign{ & {\text{The}}\,{\text{difference}}\,{\text{between}}\,{\text{compound}}\,{\text{interest}}\,{\text{and}} \cr & {\text{simple}}\,{\text{interest}}\,{\text{over}}\,{\text{two}}\,{\text{years}}\,{\text{is}}\,{\text{given}}\,{\text{by}} \cr & \frac{{{{\Pr }^2}}}{{{{100}^2}}}\,or\,P{\left( {\frac{r}{{100}}} \right)^2} \cr & {\text{Here,}}\,{\text{Principal}}\,\left( P \right) = Rs.\,2000 \cr & {\text{Rate}}\,\left( r \right) = 5\% \cr & {\text{Now}}\,{\text{difference}}, \cr & D = \frac{{ {2000 \times 5 \times 5} }}{{ {100 \times 100} }} \cr & D = Rs.\,5 \cr} $$Join The Discussion
Comments ( 5 )
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Diff=p(r/100)2 it is only for two years
2000*25/10000=5
Either you can simply use both formulas or you can split compound interest into one by one ...
I can't understand by this formula
2000*25/10000 = 5
CI-SI*100/5*100*5=2000
ci-si=200*25/100*100
ci-si=5