A sum of Rs. $8, 000$ is invested for 1 year at $10 %$ per annum compound interest. Calculate interest for the first year.

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Solution

Amount at the end if n years compounded annually $= A = P {(1 + \frac{R}{100})}^{n}$
Here,
$P = R s 8, 000$
$n = 1 y e a r$
$R = 10$ %
So, $A = 8, 000 \times {(1 + \frac{10}{100})}^{1}$
$=> A = 8, 000 \times \frac{11}{10} = R s 8, 800$
So, $I n t e r e s t = A m o u n t - P r i n c i p a l = R s 8800 - R s 8000 = R s 800$

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