Question

Find the amount on Rs. 20,000 after 2 years if the rates of interest are 2% and 3% for successive years.

Answer 1

We have P = Rs. 20,000, R${}_1$ = 2% and R${}_2$ = 3% and n = 2 years.
Here, we can find the amount directly using the formula,
$A=P(1+\frac{R_1}{100})(1+\frac{R_2}{100})$
Thus,
$A=20,000(1+\frac{2}{100})(1+\frac{3}{100})=20,000\left(1.02\right)\left(1.03\right)=21,012.$
Hence the amount after 2 years is $Rs.21,012$.