Question

8,000 is lent out at 7% compound interest
for 2 years. At the end of the first year
3,560 are returned. Calculate :
(i) the interest paid for the second year.
(ii) the total interest paid in two years
iii) the total amount of money paid in two
years to clear the debt.​

Answer 1

Answer:

solution, principal =8000

rate=7%

time=2years

in first year

ci=(p(1+r/100)^t-1)

=(8000(1+10/100)^1-1)

=8000×0.1

=800

returned money=3560

8000-3560

=4440

second year

ci=(p(1+r/100)^t-1)

=4440×0.1

=444

total interest paid in two years =800+444

=1244