Question

Question 1 (b)
Calculate the amount and compound interest on:
b) Rs 18,000 for $2\frac{1}{2}\%$ years at 10% per annum compounded annually.

Answer 1

(b) Here Principal (P) = Rs 18,000, Time (n) = $2\frac{1}{2}$ Years, Rate of interest (R) = 10% p.a.
$Amont\left(A\right)={(1+\frac{R}{100})}^n=18000{(1+\frac{10}{100})}^2=18000{(1+\frac{1}{10})}^2=$
$18000(\frac{11}{10}{)}^2=18000\times \frac{11}{10}\times \frac{11}{10}$
=Rs.21,780
Interest for 6 months on Rs 21,780 at rate of 10% = $\frac{21780\times 10\times 1}{200}=Rs.1,089$
Total amount for $2\frac{1}{2}$ years = Rs 21,780 + Rs 1089 = Rs 22,869
Compound Interest (C.I) = A - P = Rs 22,869 - Rs 18,000 = Rs 4,869