Question

Question 1 (b)
Calculate the amount and compound interest on:

b) ₹18,000 for $2\frac{1}{2}\%$ years at 10% per annum compounded annually.

Answer 1

(b) Here, Principal (P) = ₹18,000,
Time (n) = $2\frac{1}{2}$ Years,
Rate of interest (R) = 10% p.a.

$Amount\left(A\right)$
$=P{(1+\frac{R}{100})}^n$
$=18000{(1+\frac{10}{100})}^2$
$=18000{(1+\frac{1}{10})}^2$
$=18000(\frac{11}{10}{)}^2$
$=18000\times \frac{11}{10}\times \frac{11}{10}$
$=₹21,780$

Interest for 6 months on ₹21,780 at rate of 10%
$=\frac{21780\times 10\times 1}{200}=₹1,089$

Total amount for $2\frac{1}{2}$ years
$=₹21,780+₹1089=₹22,869$

Compound Interest (C.I)
$=A-P$
$=₹22,869-₹18,000$
$=₹4,869$