Question

An amount of 8400 is borrowed for 2 years at 5% per annum. Find the
compound interest and the amount, when the interest is compounded annually.​

Answer 1

Answer:

Amount to be returned at the end of 2nd year = 9261

Compounded interest = 861

Step-by-step explanation:

Given,

$P_{1}$= 8400

R = 5%

T = 2

SI for the first year  = 8400*5* 1/100 = 420 = $SI_{1}$

The principle for year 2 becomes 8400 + 420 = 8820 = $P_{2}$

SI for the second year = 8820 * 5 * 1/100 = 441 = $SI_{2}$

Amount to be returned at the end of 2nd year = $P_{2}$ + $SI_{2}$

= 8820 + 441

= 9261

Total interest given = $S_{1} + S_{2}$

= 420 + 441

= 861

Hence,

Amount to be returned at the end of 2nd year = 9261

Compounded interest = 861

Hope it helps..