Compound Interest Quiz Set 013

The shortcut formula for the difference between compound and simple interest over a period of 2 years is $Difference = Principal × (\text"rate"/100)^2$, which equals $(90000 × 2^2)/10000$ = Rs. 36.

In this case r = $28/4$% and n = 2 because compounding is quarterly. So A = 40000 × $(1 + 7/100)^2$, which equals 4 × 107 × 107, i.e., Rs. 45796.

The amount is 3000000 + 278181. So 3278181 = 3000000 × $(103/100)^n$. So $3278181/3000000$ = $(103/100)^n$, which can be put in the form $(103/100)^3$ = $(103/100)^3$, so n = 3 years.

The amount is 40000 + 4100. So 44100 = 40000 × $(105/100)^n$. So $44100/40000$ = $(105/100)^n$, which can be put in the form $(105/100)^2$ = $(105/100)^n$, so n = 2 years.

If d is the difference, r is the rate and P is the principal, then the shortcut formula for the difference between compound and simple interest over a period of 2 years is d = P × $(r/100)^2$. So rate = 100 × $√{d/P}$ = 100 × $√{175/70000}$ = 5%.