Question

A person invests rs 5000 for three years at a certain rate of interest compounded anually At the end of the years this sum amounts to rs 6272 . Calculate:
(i) the rate of interest per annum
(ii) the amount at the end of the third year.​

Answer 1

Answer:

A=Rs.6272,P=Rs.5000,T=2 years

Part (i)

We know that

A=P(1+

100

R

)

T

or, 6272=5000(1+

100

R

)

2

or, (1+

100

R

)

2

=1.2544

or, 1+

100

R

=1.12

or,

100

R

=0.12

or, R=12%

Part (ii)

The amount at the end of the 3rd year.

A=5000(1+

100

12

)

3

A=5000(1+

25

3

)

3

A=5000(

25

28

)

3

A=Rs.7024.64