find the difference between the simple intrest and the compound intreston 5000 for 2 years at 9% per annum.
simple interest = PRT
= 5000(.09)(2) = $ 900
compound interest
= 5000( 1.09)^2 - 5000
= $ 940.50
40.50
pelna anus
To find the difference between simple interest and compound interest, you need to first calculate the values for both.
First, let's calculate the simple interest:
Simple Interest (SI) can be calculated using the formula:
SI = (Principal * Rate * Time) / 100
Given:
Principal (P) = $5000
Rate (R) = 9% per annum
Time (T) = 2 years
Substituting the given values into the formula, we get:
SI = (5000 * 9 * 2) / 100
SI = 900
Now, let's calculate the compound interest:
Compound Interest (CI) can be calculated using the formula:
CI = P * (1 + (R/100))^T - P
Given:
Principal (P) = $5000
Rate (R) = 9% per annum
Time (T) = 2 years
Substituting the given values into the formula, we get:
CI = 5000 * (1 + (9/100))^2 - 5000
To evaluate this expression, we first calculate (1 + (9/100))^2:
(1 + (9/100))^2 = (1.09)^2 = 1.1881
Now substituting this value back into the formula, we get:
CI = 5000 * 1.1881 - 5000
CI = 909.05
Finally, to find the difference, we subtract the simple interest from the compound interest:
Difference = CI - SI
Difference = 909.05 - 900
Difference = 9.05
Therefore, the difference between the simple interest and compound interest on $5000 for 2 years at 9% per annum is $9.05.