If the simple interest on a sum of money for 2 years at 5% per annum is Rs. 50, what is the compound interest on the same at the same rate and for the same time?
papay dey Answered question 7 days ago
Simple Interest (SI) formula:
SI = (P × R × Time) / 100
Given values:
SI = Rs. 50
R = 5% per annum
Time = 2 years
Rearrange the SI formula to solve for P:
P = (SI × 100) / (R × Time)
= (50 × 100) / (5 × 2)
= 500
Now, calculate the Compound Interest (CI):
CI = P × (1 + R/100)^Time – P
= 500 × (1 + 5/100)^2 – 500
= 500 × (1.05)^2 – 500
= 500 × 1.1025 – 500
= 551.25 – 500
= 51.25
The compound interest is Rs. 51.25.
papay dey Answered question 7 days ago
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