Question

Find the amount and the compound interest on $Rs.8000$ at $5\%$ per annum for $2$ years, compounded annually.

Answer 1

Given:

Principal $\left(P\right)=Rs.8000$

Rate of interest $\left(R\right)=5\%$ per annum

Time $\left(T\right)=2$ years

Total amount on compounded annually,

$A=P\times (1+\frac{R}{100}{)}^T$

$=Rs.8000\times (1+\frac{5}{100}{)}^2$

$=Rs.8000\times (1+\frac{1}{20}{)}^2$

$=Rs.8000\times (\frac{21}{20}{)}^2$

$=Rs.8000\times \frac{21}{20}\times \frac{21}{20}$

$=Rs.20\times 21\times 21$

$=Rs.8820$

$\therefore A=Rs.8820$---(1)

$\Rightarrow C.I=A-P$

$=Rs.8820-Rs.8000$

$=Rs.820$---(2)

$\therefore$ Amount is $Rs.8820$ and compound interest is $Rs.820.$