Question

Find the compound interest on a principal of ₹5,000 at the rate of 20% for 2 years?

Answer 1

P = ₹5000, R = 20%, n = 2 years
$A=P{\left(1+\frac{R}{100}\right)}^n$
$A=5000\times {\left(1+\frac{20}{100}\right)}^2$
$A=5000{\left(1.2\right)}^2$
$A=5000\times 1.44$
A = ₹7200

The difference in the final amount and the principal is the interest.

CI = A - P

= 7200-5000
= 2200

So, the interest is ₹2200.