Question

Calculate Compound Interest On $1000 Over A Period Of 1 Year At 10% Per Annum,If Interest is compounded annually?

Answer 1

Given :-

• Principle (P) = $1000

• Rate of interest (R) = 10%

• Time (T) = 1 years

To find :-

• Compound interest (C.I)

Solution :-

As we know that

→ Amount = P(1 + R/100)ⁿ

" n " denotes time

→ A = P(1 + R/100)ⁿ

Substitute all the values of principle, rate and time

→ A = 1000(1 + 10/100)¹

→ A = 1000(1 + 1/20)

→ A = 1000(20 + 1/20)

→ A = 1000 × 21/20

→ A = 50 × 21

→ A = $1050

• Therefore, amount is $1050

Compound interest = Amount - Principle

→ C.I = 1050 - 1000

→ C.I = $50

Hence,

• Compound interest is $50

More to know :-

• Simple Interest = Principle × rate × time/100
• S.I = P × R × T/100