Question

Find amount & compound interest where p=10800,R=12 1/2 % pa componded annually by simple interest method

Answer 1

Answer :

Given : Principle amount P = Rs . 10800

Rate of interest = r = $12\frac{1}{2}=\frac{24+\hspace{0.17em}1}{2}=\frac{25}{2}\%$ Compound annually

Here time is not given , We assume time = 2 years

We know formula for simple interest ,

Simple interest = $\frac{P\times r\times t}{100}$

To find compound interest for 2 year we find simple interest of 1 years :

Simple interest = $\frac{10800\times {\displaystyle \frac{25}{2}}\times 1}{100}=\frac{5400\times 25}{100}=\frac{5400}{4}=\mathbf{1350}$

For second year principle amount = 10800 + 1350 = Rs . 12150 , So

Simple interest = $\frac{12150\times {\displaystyle \frac{25}{2}}\times 1}{100}=\frac{6075\times 25}{100}=\frac{6075}{4}=\mathbf{1518}\mathbf{.}\mathbf{75}$

So,

Amount after two year = 12150 + 1518.75 = Rs .13668.75 ( Ans )

And

Compound interest = 13668.75 - 10800 = Rs . 2868.75 ( Ans )