a person invests rs 10000 for 3 years at 5% per annum compound interest in a company find the amounts at the end of 3rd year.
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Answer:
It is given that
Principal(P) = 10,000
Period (T)= 1 year
Sum amount (A)= 11200
Rate of interest =?
(i) We know that
Interest (I)= 11200- 10000= 1200
So the rate of interest
R= (1×100)/(P×T)
Substituting the values
R= (1200×100)/(1000×1)
So we get
R= 12% p.a
Therefore, the rate of interest per annum is 12% p.a
(ii) We know that
Period (T)= 2 years
Rate of interest (R) = 12% p.a.
Here
A =P(1+R/100)
1
Substituting the values
A = 10000(1+12/100)
2
By further calculation
A= 10000(28/25)
2
We can write it as
A= 10000×28/25×28/25
So we get
A=16×28×28
A=12544
Therefore, the amount at the end of the second year is 12544.
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