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  • Category: Exam Questions

    How to solve these type of S.I and C.I questions


    Want to calculate simple and compound interest? Looking out for how to so? Find suggestions from experts here and resolve yuor query.

    Can you solve this?
    Amit invested two equal sums of Rs. 5000 for 2 years at 10% C.I. – one at C.I. payable yearly and other at C.I. payable half yearly. Find the difference in amounts that he will get at the end of 2 years.
  • #144958
    As your question is not very clear regarding whether it is a cumulative or non-cumulative deposit but I am inferring that it is cumulative and the payment of interest is at the end of 2 years along with principal amount of Rs 5000 in each case.

    With this we go ahead and use the formula for finding the final value of FD on maturity.

    The formula is -

    A = P*(1+(r/100*n))^nt

    Where A is final maturity amount
    P is principal amount
    r is rate of interest in %
    n is the frequency of interest compounding in a year
    t is the time of deposit in years

    Case 1:

    P=5000, r=10, n=1, t=2
    Which gives A = 6050

    Case 2:
    P=5000, r=10, n=2, t=2
    Which gives A = 6077.53

    Now the difference of amounts is 6077.53-6050=27.53

    So difference is Rs 27.53

    Knowledge is power.

  • #145030
    In simple Interest case
    Amit Invested P =Rs. 5000
    Rate = 10%
    Time = 2 years
    S.I = p*r*t/100 =
    = 5000*10*2/100
    = 1000
    Amount = P+S.I
    = 5000+1000
    = Rs 6000

    As per your question
    Case 1 :
    P= Rs 5000
    R= 10% per annum
    T= 2 years
    A= p(1+r/100)^t
    = 5000(1+10/100)^2
    = 5000*110/100*110/100
    = Rs 6050
    In case 2 :
    P= Rs 5000
    R=10% half yearly
    T= 2 years
    A=p(1+r/2/100)^2t
    =5000(1+10/2/100)2*2
    = 5000*105/100*105/100*105/100*105/100
    = Rs 6077.53

    Difference = Rs 6077.53 -Rs 6050
    = Rs 27.53

  • #145040
    In case of simple interest, Interest earned=5000x10x2/100=1000
    Therefore, Principal+Interest=5000+1000=6000
    (Formula used: I=PRT/100)

    In case of compund interest, Principal+Interest=5000(1+10/2/100)2*2=6077.53

    Difference=P+I (in case of compound interest) - P+I (in case of simple interest)=27.53 [Answer]

    Caution: Explosive. Handle with care.


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