Question

Find the amount and compound interest for Rs. $1,200$ for $4$ years at the rate of $5\%$ per annum interest.

Answer 1

The interest of one year $=\frac{1,200\times 5\times 1}{100}$
$=Rs.60$
Now, principle for second year$=1,200+60$
$=Rs.1,260$
Further, the interest for $2$nd year $=\frac{1,260\times 5\times 1}{100}$
$=Rs.63$
Now, principal for $3$rd$=1260+63$
$=Rs.1,323$
Further, the interest for $3$rd year$=\frac{1323\times 5\times 1}{100}$
$=Rs.66.15$
Now, principal for $4$th year$=1,323+66.15$
$=Rs.1,389.15$
Further, the interest for $4$th year$=\frac{1,389.15\times 5\times 1}{100}$
$=Rs.69.46$
Principal after four year$=1,389.15+69.46$
$=Rs.1,458.61$
Total compound interest for four year$=1,458.61-1,200$
$=Rs.258.61$.