Answer:
The statement is TRUE
Step-by-step explanation:
To Prove : if principal , interest rate , and time are identical for both compound interest and simple interest , then CI is more than SI .
Let we take the value :
Principal = Rs 1000
Rate of interest = 4%
Time period = 2 year
At First , for compound interest
Amount = Principal [tex]( 1+ \frac{Rate}{100})^{Time}[/tex]
A = 1000 [tex]( 1+ \frac{4}{100})^{2}[/tex]
So , A = 1000 ([tex]\frac{26}{25}[/tex])²
Or, A = 1000 × 1.0816 = 1081.6
So , CI = A - P
CI = 1081.6 - 1000 = Rs 81.6
At second , for simple interest
SI = [tex](\frac{P \times R \times T}{100})[/tex]
Or, SI = [tex](\frac{1000 \times 4 \times 2}{100})[/tex]
I.e SI = Rs 80
Hence from the above two solution of Compound Interest and Simple Interest , it is proved that interest obtain from CI is more than SI . PROVED
