Question

A man invests Rs. 5,600 at 14% per annum compound interest for 2 years. Calculate :

(i) the interest for the first year.

(ii) the amount at the end of the first year.

(iii) the interest for the second year, correct to the nearest rupee.

Answer 1

(i) For 1^st years

P = Rs. 5600

R = 14%

T = 1 year

(ii) Amount at the end of the first year

= 5600 + 784

= Rs. 6384

(iii) For 2^nd year

P = 6384

R = 14%

R = 1 year

= Rs. 803.76

= Rs. 894 (nearly)