Question

Question 79(iii)

Given, the principal = Rs. 40000, rate of interest = 8% per annum compound annually. Find Interest for 2nd year.

Answer 1

Given, principal (P)= Rs. 40000
Rate of interest (R) = 8% per annum

Amount After first year $=40000{(1+\frac{8}{100})}^1$

$=40000\times \frac{108}{100}=Rs.43200$
Now, for 2nd year,
Principal = Rs. 43200
Rate of interest, R = 8% per annum
Time, n = 1yr
Smount for 2nd year $=43200{(1+\frac{8}{100})}^1$
$=43200\times \frac{108}{100}=432\times 108=Rs.46656$
Compound interest, CI = A - P = Rs. 46656 - Rs.43200 = Rs.3456