Question

A man invests Rs. 9600 at 10% per annum compound interest for 3 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.
(iv) the interest for the third year.

Answer 1

Principal(P)=Rs. 9600
Rate(R) =10% p.a.
Period(n)=3 years
(i) $\therefore$ Interest for the first year= $\frac{PTR}{100}$
$=\frac{9600\times 10\times 1}{100}=Rs.960$
(ii) Amount at the end of first year
=P+S.I.= Rs. 9600 +960 =Rs. 10560
(iii) Principal for the second year=Rs. 10560
Interest for the second year= $\frac{10560\times 10\times 1}{100}$
=Rs. 1056
$\therefore$ Amount after second year=Rs.10560 + 1056+Rs. 11616
(iii) Principal for the third year=Rs. 11616
Interest for the third year= $\frac{11616\times 10\times 1}{100}$
$116.16\times 10=Rs.1161.60$