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The SI on a certain sum of money for 2 years at 14% per annum is 2100 find the compound interest on the sum.

User Parapote
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Final answer:

Given a simple interest of 2100 for 2 years at 14% per annum, we calculated the principal amount and used it to find the compound interest for the same period, which turned out to be 2247.

Step-by-step explanation:

The question revolves around the concept of both simple interest (SI) and compound interest (CI). Given that the simple interest on a certain sum of money for 2 years at 14% per annum is 2100, we can find the principal amount using the formula for simple interest: SI = P * R * T / 100, where P is the principal, R is the rate of interest per annum, and T is the time in years.

Plugging the values into the formula:

2100 = P * 14 * 2 / 100

P = 2100 * 100 / (14 * 2)

P = 7500

Now that we have the principal amount, we can calculate the compound interest for the same period using the formula for compound interest: A = P(1 + R/100)^T, where A is the amount after T years.

For the first year:

A1 = 7500(1 + 14/100)^1

A1 = 7500 * 1.14

A1 = 8550

For the second year:

A2 = 8550(1 + 14/100)^1

A2 = 8550 * 1.14

A2 = 9747

The total compound interest for the 2 years is A2 - P = 9747 - 7500 = 2247. Hence, the compound interest on the sum for 2 years at 14% per annum is 2247.

User Aspirisen
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