Question

6. What sum will amount to 23600 at 9% per annum at the end of 2 years?​

Answer 1

Answer:

For SI 20000

For CI 19863.6478411

Step-by-step explanation:

Amount can be develop in 2 ways

Simple Interest and Compound Interest

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Simple Interest SI = P×r×n

where:

P = Principal amount

r = Annual interest rate

n =Term of loan, in years

Amount A = SI + P = 23600

P(1+rn) = 23600

P (1 + 0.09*2) = 23600

P = 23600 / 1.18 = 20000

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Compound Interest

$CI = P(1+r)^{t} - P$

where:

P=Principal amount

r=Annual interest rate

t=Number of years interest is applied

Amount A = CI + P = 23600

$A = P (1 + r)^{t}$

$23600 = P (1 + 0.09)^{2} = 1.1881 P$

P = 23600 / 1.1881 = 19863.6478411

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