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(iii) Find the sum of money required to clear the debt at the end of 2 years.
(iv) Find the difference between the compound interest and simple interest at the
same rate for 2 years.
Solution:
= $1010010100 × 10,000
= $ 1,000
= $10,000 + $ 1,000
= $ 11,000
= $1010010100 × 11,000
= $ 1,100
Therefore, the compound interest for 2 years = the interest for the 1st year + the
interest for the 2nd year
= $ 1,000 + $ 1,100
= $ 2,100
(iii) The required sum of money = Principal + compound Interest for 2 years
= $ 10,000 + $ 2,100
= $ 12,100
= $ 2,000
Solution:
= $ 41004100 × x
= $ 4x1004�100
= $ x25�25
= $ x + $ x25�25
= $ 26x2526�25
For the second year, the new principal is $ 26x2526�25
Therefore, the interest for the 2nd year = 4 % of $ 26x2526�25
= $ 41004100 × 26x2526�25
= $ 26x62526�625
Compound interest for 2 years = $ x25�25 + $ 26x62526�625
= $ 51x62551�625
At 4% rate simple interest for 2 years = $26x25×4×T10026�25×4×�100
= $x×4×2100�×4×2100
= $8x1008�100
= $2x252�25
51x62551�625 - 2x252�25 = 80
⟹ x(5162551625 - 225225) = 80
⟹ x625�625 = 80
⟹ x = 80 × 625
⟹ x = 50000
3. Find the amount and the compound interest on $10,000 at 8% per annum and in 1
year, interest will being compounded half-yearly.
Solution:
Rate = 8%
Time = ½ year
= $ 400
= $ 10,000 + $ 400
= $ 10,400
= $ 416
= $10,400 + $ 416
= $ 10,816
= $ 10,816 - $ 10,000
= $ 816
(i) When the interest is compounded yearly, then the principal does not remain same
every year.
(ii) When the interest is compounded half-yearly, then the principal does not remain
same every 6 months.