Question

Calculate the amount and the compound
interest on 12,000 in 2 years at 10% per
year.​

Answer 1

$12000 \times 10 \div 100$

1200

Answer 2

Solution!!

The concept of compound interest has been used here. The principal, time and rate of interest is given. We have to find the amount and the compound interest.

For 1st year

Principal (P) = Rs 12,000

Time (T) = 1 year

Rate of interest (R) = 10%

Interest = (P × R × T)/100

Interest = (12,000 × 10 × 1)/100

Interest = 120 × 10 × 1

Interest = Rs 1200

Amount = Principal + Interest

Amount = Rs 12,000 + Rs 1200

Amount = Rs 13,200

(The amount in 1st year is the principal in 2nd year)

For 2nd year

Principal (P) = Rs 13,200

Time (T) = 1 year

Rate of interest (R) = 10%

Interest = (P × R × T)/100

Interest = (13,200 × 10 × 1)/100

Interest = 132 × 10 × 1

Interest = Rs 1320

Amount = Principal + Interest

Amount = Rs 13,200 + Rs 1320

Amount = Rs 14,520

Compound interest in 2 years = Rs 1200 + Rs 1320

Compound interest in 2 years = Rs 2520