Question

a man invests ₹5,600 at 14% per annum compound interest for 2year calculate
(1)the interest for the first year
(2)the amount at the end of the first year
(3)the interest for the second year, correct to the interest rupees

Answer 1

Answer:

(i) 784

(ii) 6384

(iii) 894

Step-by-step explanation:

Principal = P = 5600

Rate of Interest = i = 14%

Period = n = 2

(i) Interest for the first year = $\frac{P x R x T}{100}$ = $\frac{5600 x 14 x 1}{100}$ = 784

(ii) Amount at the end of first year = Principal + Interest = 5600 + 784 = 6384

(iii) Interest for the second  year = $\frac{6384 x 14 x 1}{100}$ = 894

(since it is compound interest, the amount at the end of the first year becomes the principal for the second year)

Answer 2

Answer:

(1) 784; (2) 6384; (3) 1677.76

Step-by-step explanation:

Compound Interest when Interest is Compounded Yearly

Amount  = Principal (1+Rate of interest/100)^No. of units of time

So, Amount after 1st year is

A = P (1+r/100)^n

A = 5600 (1+14/100)^1

A = 6384

Hence, C.I = A - P

            C.I = 6384 - 5600

            C.I = 784 (at the end of the first year )

Amount at the end of 2nd year is

A = P (1+r/100)^n

A = 5600 (1+14/100)^2

A = 7277.76‬

Hence, C.I = A - P

            C.I = 7277.76 - 5600

            C.I = 1677.76 (at the end of the first year )