Question

A sum of Rs 10,000 is invested for 2 years at a compound interest rate of 5% per annum.
(i) Find the principal for the second year.
(ii) Find the amount and the interest on the sum for 2 years.​

Answer 1

Step-by-step explanation:

Principle (P) = Rs. 10000

Time (T) = 2 years

Rate of Interest (R) = 5%

i) Principle for second year = Amount at the end of first year

SI for first year = (P*R*T)/100

= (10000*5*1)/100

= 100*5*1 = 500 Rs

Amount of first year = 10000 + 500 Rs

= 10500 Rs

So principle for second year = 10500 Rs

ii) Principle for second year = 10500 Rs

Interest for second year = (10500*5*1)/100

= 525 Rs

Amount at the end of second year = 10500+525

= 11025 Rs

Interest for two years = 500+525 = 1025 Rs