Question

Mohit invests Rs.8,000 for 3 years at a certain rate of interest, compounded annually. At the end of one year it amounts to Rs. 9,440. Calculate :

(i) the rate of interest per annum.

(ii) the amount at the end of the second year.

(iii) the interest accrued in the third year.

Answer 1

For 1^st year

P=Rs8,000; A=9,440 and T= 1year

Interest= Rs9,440 - Rs8,000= Rs1,440

Rate=%=%=18%

For 2^nd year

P= Rs9,440; R=18% and T= 1year

Interest= Rs= Rs1,699.20

Amount= Rs9,440 + Rs1,699.20= Rs11,139.20

For 3^rd year

P= Rs11,139.20; R=18% and T= 1year

Interest= Rs= Rs2,005.06