Question

Find the amount of Rs. $6000$ for $2\frac{1}{2}$ years, compounded annually at $5\%$ per annum. Also find the C.I.

Answer 1

We know the formula,
$A=P{(1+\frac{r}{n})}^{n.t}$
Given, $P=$ Rs. $6000$, $r=5\%$, $n=1$ and $t=$ $2\frac{1}{2}$ years
Therefore, we have $A=6000{(1+\frac{0.05}{1})}^{1\times 2.5}$
$\Rightarrow A=6000\times {1.05}^{2.5}$
$A=6000\times 1.129726$
$A=6778.36$
To find interest we use formula $A=P+I$, since $A=6778.36$ and $P=6000$

we have:
$A=P+I$
$\Rightarrow 6778.36=6000+I$
$I=6778.36-6000$

$=778.36$
Interest, $I=$ Rs. $778.36$