Question

Using the formula , calculate the amount and the compound interest :-
$P=Rs.500,R=12\%$ per annum, $n=2$ years

Answer 1

Given $P=Rs.500,R=12\%$ and $n=2$.

Now total amount when the principle compounded after $2$ years will be

$A=P(1+\frac{r}{100}{)}^n$

$=500\times {(1+\frac{12}{100})}^2$

$=500\times {\left(\frac{112}{100}\right)}^2$

$=500\times \left(\frac{112}{100}\right)\times \left(\frac{112}{100}\right)$

$=627.20$.

So the amount will be $Rs.627.20$ and compound interest will be $Rs.(627.20-500)=Rs.127.20$.