If the simple interest on a sum of money for 2 years at 5% per annum is Rs. 50, what is the compound interest on the same sum at the rate and for the same time?
Q1. If the simple interest on a sum of money for 2 years at 5% per annum is Rs. 50, what is the compound interest on the same sum at the rate and for the same time?
Answer: Rs. 51.25
Explanation: SI = Rs. 50 on 2 years at 5%, so principal = Rs. 500; CI = 500×((1.05)²−1) = 500×0.1025 = Rs. 51.25.