Question

Calculate the compound interest on 5,000
in 2 years; if the rates of interest for successive
years be 10% and 12% respectively.​

Answer 1

Step-by-step explanation:

For 1st year

Principal (P) = Rs. 5,000

Rate (R) = 10%

Time (T) = 1 Year

∴ Interest = (5,000 × 10 × 1)/100 = 50 × 10 = Rs. 500

∴ Amount at the end of 1ST year = Rs. (5000 + 500) = Rs. 5500

For 2nd year

P = Rs. 5550

Rate 12%

T = 1 year

∴ Interest = (5500 × 12 × 1)/100 = 55 × 12 = Rs. 660

∴ Amount at the end of 2nd year

= Rs. 5500 + Rs. 660 = Rs. 6160

Hence compound interest = Rs. 6160 – Rs. 5000

= Rs. 1160