Question

Daljit received a sum of Rs. 40000 as a loan from a finance company. If the rate of interest is 7% per annum compounded annually, calculate the compound interest that Daljit pays after 2 years.

Answer 1

$$\begin{gathered} \mathrm{A}=\mathrm{P}{\left(1+\frac{\mathrm{R}}{100}\right)}^{\mathrm{n}} \\ =40,000{\left(1+\frac{7}{100}\right)}^2 \\ =40,000{\left(1.07\right)}^2 \\ =45,796 \\ \mathrm{Thus},\mathrm{the}\mathrm{required}\mathrm{amount}\mathrm{is}\mathrm{Rs}45,796. \\ \mathrm{Now}, \\ \mathrm{CI}=\mathrm{A}-\mathrm{P} \\ =\mathrm{Rs}45,796-\mathrm{Rs}40,000 \\ =\mathrm{Rs}5,796 \end{gathered}$$