A Sum of Rs 10000 is invested for 3 years at 10%. P.a. Find the C.I. (a) What is the sum due at the end of the 1st year? (b) Find the amount at the end of 3 years.
Answers
A sum of 9600 is invested for 3 years at 10% per annum at compound interest.
(i) What is the sum due at the end of first year?
(ii) What is the sum due at the end of the second year?
(iii) Find the compound interest earned in 2 years.
(iv) Find the difference between the answers in (ii) and (i) and find the interest on this sum for one year
(v) Hence, write down the compound interest for the third year.
Solution
It is given that
Principal= Rs 10000
Rate of interest = 10% p.a
Period = 3 years
We know that
Interest for the first year= Prt/100
Substituting the values
= (10000×10×1)/100
= 1000
(i) Amount after one year = 10000- 1000= 9000
So the principal for the second year = 9000
Here the interest for the second year= (9000×10×1)/100
=900
(ii) Amount after 3 years =9000+900=9900