Question

(2) A person invests 5000 for two years at a certain rate of interest compounded annually. At the end of one year,
this sum amounts to * 5600. Calculate (i) the rate of interest per year (ii) the amount at the end of the second
year.
Solution :​

Answer 1

Here is your answer,

Principal (P) = Rs. 5000

Period (T) = 2 Years

Amount at the end of one year = Rs. 5600

∴ Interest for the first year = A – P

= Rs. 5600 – 5000 = Rs. 600

(i) ∴ Rate of interest = (S.I. × 100)/( P × T)

= (600 × 100)/(5000 × 1) = 12%

(ii) Principal for the second Year = Rs. 5600

Interest for the second year = (5600 × 12 × 1)/100

= ₹ 672

∴ Amount at the end of second year

= P + S.I. = 5600 + 672 = ₹ 6272

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