Question

Find the compound interest if the amount of a certain principal after two years is ₹4036.80 at the rate of 16 p.c.p.a.

Answer 1

Here, P = Principal
A = ₹ 4036.80
I = Compound Interest
R = 16 %
N = 2 years

$$\begin{gathered} \mathrm{A}=\mathrm{P}{\left(1+\frac{\mathrm{R}}{100}\right)}^{\mathrm{N}} \\ \Rightarrow 4036.80=\mathrm{P}{\left(1+\frac{16}{100}\right)}^2 \\ \Rightarrow 4036.80=\mathrm{P}{\left(1+\frac{4}{25}\right)}^2 \\ \Rightarrow 4036.80=\mathrm{P}{\left(\frac{29}{25}\right)}^2 \\ \Rightarrow \mathrm{P}=\frac{4036.80\times 25\times 25}{29\times 29} \\ \Rightarrow \mathrm{P}=3000 \end{gathered}$$

Also,
I = A − P
= 4036.80 − 3000
= 1036.80

Hence, the compound interest is ₹ 1036.80