Question

Calculate the compound interest for the
second year on 15,000 invested for 5 years
at 6% per annum.​

Answer 1

Answer:

The answer is Rs.954

Step-by-step explanation:

We are assuming that the implied currency is Rupees.

If a sum P is invested for T years earning compound interest R (per cent per year), it will become A at the end of T years. Then:

A = P*(1 + R/100)^T

In our problem, P = 15000 and R = 6

At the end of the second year,

A = 15000*(1 + 6/100)^2

   = 15000*(1.06)^2

   = 16854              (Eqn 1)

Similarly, at the end of the first year,

A = 15000*(1.06)^1

   = 15900              (Eqn 2)

Now:

The difference between amount at the end of the second year and the amount at the end of the first year will give us the interest earned during the second year.

Hence, from Eqn 1 and Eqn 2, we get the required answer as:

16854 - 15900 = 954