Question

Maria invested $Rs8,000$ in a business. She would be paid interest at $5\%$ per annum compounded annually. Find
(i) The amount credited against her name at the end of the second year.
(ii) The interest for the $3$rd year.

Answer 1

i) $A=P{(1+\frac{r}{100})}^n=8000{(1+\frac{5}{100})}^{\left(2\right)}=8000\left(1.1025\right)=8820$

Amount at the end of $2$ years $=Rs.8,820$

ii) $A=p{(1+\frac{r}{100})}^n=8000{(1+\frac{5}{100})}^{\left(3\right)}=8000\left(1.157625\right)=9261$

Amount at the end of $3$ years $=Rs.9261$

So, the interest for $3^{rd}$ year $=Rs.9261-8820=Rs.441$