Question

A sum of rupees 9600 is invested for 3 years at 10% per annum compound interest .
1) Find the compound interest earned in the first two years .
2) Find the compound interest at the end of three years .

Answer 1

Compound interest after 1 year = same as simple interest = 
           = Rs 9, 600 * 10/100 * 1 = Rs 960

Compound interest earned during 2ng year = simple interest + interest on interest
            = Rs 960 + Rs 960 * 10/100 * 1 = Rs 1,056
total compound interest earned in two years = Rs  2, 016

compound interest during 3rd year 
        = simple interest + interest on interest 
           = Rs 960 + Rs 1, 056 * 10/100 * 1 
             = Rs 1, 065.60

Total compound interest earned  in 3 years  = Rs 3, 081.60

You can also use the formula to find the sum and interest.

Answer 2

Step-by-step explanation:

1) I = PRT/100

= 9600*10*1 / 100

I = ₹ 960

A = P + I

= 9600+960

A = ₹10560

2). I = PRT/100

= 10560*10*1/100

I = ₹ 1056

A = P+I

= 10560+1056

A = ₹ 11616

3) = 1st year interest + 2nd year interest

= 960+1056

= ₹ 2016

4). I = PRT/100

= 11616*10*1/100

= 11616/10

I = ₹ 1161.6

A = P+I

= 11616+1161.6

A = ₹ 12777.6

compound interest = A - P

= 12777.6 - 9600

compound interest = ₹ 3177.6