Question
On a certain sum, the simple interest for 2 years at 10%
per annum is Rs 2,000. Find the compound interest on the same sum at the same rate and time, compounded annually.Solution
Let principal = P. SI for 2 years: = P × 10 × 2 / 100 = P/5 Given P/5 = 2,000 ⇒ P = 10,000 For CI: Amount A = P(1 + 10/100)² = 10,000 × (11/10)² = 10,000 × 121/100 = 12,100 CI = A − P = 12,100 − 10,000 = 2,100 Answer: Compound Interest = Rs 2,100.
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