first we will take out the SI on principle 20,000 for 2 years at 6 % rate..
So,
SI = PxRxT / 100
SI = 20,000 × 6 × 2 / 100
SI = 24,00
Now, Cl on semi annualy..
For CI first we will take out the amount.
So..
P = 20,000
R = 6% = 6/2 = 3%
T = 2yrs = 2x2 = 4yrs
now,
A = p ( 1 + r / 100 ) ^ n
A = 20,000 ( 1 + 3 / 100 ) ^ 4
A = 20,000 ( 100 + 3 / 100 ) ^ 4
A = 20,000 ( 103/100 ) ^ 4 / 100
A = 20,000 × 103 / 100 × 103 / 100 × 103 / 100 × 103
A = 22,510.17
now, CI
CI = A - P
CI = 22,510.17-20,000 CI = 2510.17
now, difference between Sl and Cl
Difference = CI - SI
Difference = 2510.17-2400
Difference = 110.17
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Answers & Comments
first we will take out the SI on principle 20,000 for 2 years at 6 % rate..
So,
SI = PxRxT / 100
SI = 20,000 × 6 × 2 / 100
SI = 24,00
Now, Cl on semi annualy..
For CI first we will take out the amount.
So..
P = 20,000
R = 6% = 6/2 = 3%
T = 2yrs = 2x2 = 4yrs
now,
A = p ( 1 + r / 100 ) ^ n
A = 20,000 ( 1 + 3 / 100 ) ^ 4
A = 20,000 ( 100 + 3 / 100 ) ^ 4
A = 20,000 ( 103/100 ) ^ 4 / 100
A = 20,000 × 103 / 100 × 103 / 100 × 103 / 100 × 103
A = 22,510.17
now, CI
CI = A - P
CI = 22,510.17-20,000 CI = 2510.17
now, difference between Sl and Cl
Difference = CI - SI
Difference = 2510.17-2400
Difference = 110.17