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Problem: A man borrows Rs 2500 at 5 % simple interest for 2 years He immediately lends this money at compound interest at the same rate for the same time. What is the additional amount he gets at the ends of the years correct to nearest rupee? [ Calculator, Method and examples ]

Solution:
Your problem `->` A man borrows Rs 2500 at 5 % simple interest for 2 years He immediately lends this money at compound interest at the same rate for the same time. What is the additional amount he gets at the ends of the years correct to nearest rupee?


Here `P = 2500, R = 5 %, N = 2`

`SI = (P*R*N)/100 = (2500 * 5 * 2) / 100 = 6.25`

`CI = P (1 + R/100)^N - P`

`= 2500 * ( 1 + 5 / 100 ) ^ 2 - 2500`

`= 2500 * ( 105 / 100 ) ^ 2 - 2500`

`= 2500 * (( 105 / 100 ) ^ 2 - 1)`

`= 256.25`


`:.` additional amounts he gets `= CI - SI = 256.25 - 250 = 6.25` Rs.






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