Question

A sum of rs 2000 at 40% per annum compounded annually .Calculate the interest for third year at compound interest

Answer 1

Answer:

When a sum of amount is compounded anually, then there after each interest which is gained on the amount is added with the principal amount and then the next yera's principal is generated, and then on the second year the interest is calculated on the basis of the new principal.

Explanation:

so in order to calculate the interest of the amount Rs 2000/- on third year we will do the following:-

interest 1st year = 2000 * 40 / 100 = 800

new principal = 2800

interest on 2nd year = 2800 * 40 / 100 = 1120

new principal = 3420

interest on 3rd year = 3420 * 40 / 100 = 1368 Answer.

Answer 2

Answer:

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