Question

6. Find the amount and compound interest on 218,000 compounded annually, the rate of interest being
7%, 12% and 14% respectively for 3 successive years.​

Answer 1

Answer:

Compound interest = p(1+r/100)^t

For first year

= 218000(1+7/100)^1

=218000(100+7/100)

=218000(107/100)

=218000×107/100

=23,326,000/100

=233260

For second year

=233260(1+12/100)

=233260(25+3/25)

=233260×28/25

=653,128/25

=26,125.12

For third year

=26125.12(1+14/100)

=26125.12(50+7/50)

=26125.12×57/50

=1,489,131.84/50

=29,782.63

Total Amount = first year + second year + third year

= 233260 + 26125.12 + 29782.63

Amount = 79,233.75

Interest = principle - amount

= 218000 - 79233.75

= 138,766.25