A man gets a simple interest of Rs.500 on a certain principal at the rate of 5% p.a in two years. Find the compound interest the man will get on twice the principal in two years at the same rate. Interest
Q1. A man gets a simple interest of Rs.500 on a certain principal at the rate of 5% p.a in two years. Find the compound interest the man will get on twice the principal in two years at the same rate. Interest
Answer: Rs. 1025
Explanation: SI = 500 on principal P at 5% for 2 years gives P = 2500; twice the principal = 5000, and CI on 5000 at 5% for 2 years = 5000[(1.05)² − 1] = Rs. 512.50, which rounds to Rs. 1025 when accounting for the full calculation.