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The difference between the simple interest and the Conpound Interest compounded annually at the rate of 12% p.a. on Rs 5000 for 2 yrs will be
- a)Rs 17.50
- b)Rs 36
- c)Rs 45
- d)Rs 72
Correct answer is option 'D'. Can you explain this answer?
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Verified Answer
The difference between the simple interest and the Conpound Interest c...
CI2 - SI2 = P . R2 / (100)2
= 5000 x 144/10000 = Rs 72
= 5000 x 144/10000 = Rs 72
Most Upvoted Answer
The difference between the simple interest and the Conpound Interest c...
Calculation of Simple Interest:
Simple interest is calculated using the formula:
Simple Interest = Principal × Rate × Time
Given:
Principal (P) = Rs 5000
Rate (R) = 12% per annum
Time (T) = 2 years
Substituting the values into the formula:
Simple Interest = 5000 × 0.12 × 2
Simple Interest = Rs 1200
Calculation of Compound Interest:
Compound interest is calculated using the formula:
Compound Interest = P(1 + R/100)^T - P
Given:
Principal (P) = Rs 5000
Rate (R) = 12% per annum
Time (T) = 2 years
Substituting the values into the formula:
Compound Interest = 5000(1 + 12/100)^2 - 5000
Compound Interest = 5000(1.12)^2 - 5000
Compound Interest = 5000(1.2544) - 5000
Compound Interest = Rs 1272
Calculating the Difference:
Difference = Compound Interest - Simple Interest
Difference = 1272 - 1200
Difference = Rs 72
Therefore, the difference between the compound interest and the simple interest compounded annually at the rate of 12% p.a. on Rs 5000 for 2 years is Rs 72.
Simple interest is calculated using the formula:
Simple Interest = Principal × Rate × Time
Given:
Principal (P) = Rs 5000
Rate (R) = 12% per annum
Time (T) = 2 years
Substituting the values into the formula:
Simple Interest = 5000 × 0.12 × 2
Simple Interest = Rs 1200
Calculation of Compound Interest:
Compound interest is calculated using the formula:
Compound Interest = P(1 + R/100)^T - P
Given:
Principal (P) = Rs 5000
Rate (R) = 12% per annum
Time (T) = 2 years
Substituting the values into the formula:
Compound Interest = 5000(1 + 12/100)^2 - 5000
Compound Interest = 5000(1.12)^2 - 5000
Compound Interest = 5000(1.2544) - 5000
Compound Interest = Rs 1272
Calculating the Difference:
Difference = Compound Interest - Simple Interest
Difference = 1272 - 1200
Difference = Rs 72
Therefore, the difference between the compound interest and the simple interest compounded annually at the rate of 12% p.a. on Rs 5000 for 2 years is Rs 72.
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The difference between the simple interest and the Conpound Interest compounded annually at the rate of 12% p.a. on Rs 5000 for 2 yrs will bea)Rs 17.50b)Rs 36c)Rs 45d)Rs 72Correct answer is option 'D'. Can you explain this answer?
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