NOTE THAT THIS QUESTION IS CREATED BY ME TO TEST YOUR SKILLS.
The compound interest formula has 2 formulas which give different answers as it depends on the value placed on it. Number 1 is:-
[tex]A= Pe^{\frac{Rn}{100} }[/tex]
Where 'p' is the principle amount. 'e' is a mathematical constant which has the value 2.718281828 and 'R' is the rate charged. 'n' is the time.
Number 2 formula is:-
[tex]A= p(1+\frac{r}{100})^{n}[/tex]
Where 'p' is the principle amount. 'R' is the rate charged. 'n' is the time. Formula 1 gives a more value than formula 2.
Q. p has the value $2000 at the rate of 5% in a time period of 2 years. Use both formulas to calculate the compound interest and find the difference between the amount. What do you notice?
