• # 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.
• 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.

• 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

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

• 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]

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