Question

A sum of Rs.8,000 is invested for 1 years at 10 % per annum compound interest. Calculate compound interest earned in 2 years.

Answer 1

Simple Interest $I=\frac{PNR}{100}$
Here for first year,
$P=Rs8,000$
$N=1year$
$R=10$ %
So, Interest at the end of 1st year $I=\frac{8,000\times 1\times 10}{100}=Rs800$
So, for second year,
$P=Rs8000+Rs800=Rs8800$
$N=1year$
$R=10$ %
$I=\frac{8800\times 1\times 10}{100}=Rs880$
So compound interest earned in $2$ years $=Rs800+Rs880=Rs1,680$