What is the difference between compound interest on Rs.3000 for 2 years at 5% P.a. When interest is compounded yearly and compound interest on the same sum and same terms except that it is compounded half yearly?
The compound interest on a certain sum for 2 years at 10% per annum is Rs. 525. The simple interest on the same sum for double the time at half the rate percent per annum is:
Lets assume the sum = Rs. P.
Then, P(1 + 10/100)*(1 + 10/100) - P = 525
P [ (11/10)*(11/10) - 1] = 525
P = (525 x 100)/21 = 2500.
Sum = Rs . 2500.
So, S.I. = Rs. (2500 x 5 x 4)/100 = Rs. 500
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