compound interest 6400 for 2 years at 15%p.a. compounded annually
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we have to convert in fration than multiple
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Interest for first year = 6400 * 15/100 = 960 Rs.
Now A = P + I = 6400 + 960 = 7360
This becomes the 'P' for second year
Interest for second year = 7360 * 15/100 = 1104 Rs.
Amount = P + I = 7360 + 1104 = 8464
Hence C.I for 2 years = A - P = 8464 - 6400 = Rs. 2064
[Or Just add the interests-- 960+1104 = Rs. 2064]
Alternatively, the formula can also be used.
C.I = P[ (1+ r/100)^n -1 ] = 6400[ (1 + 15/100)^2 - 1] = Rs. 2064
Hope it helps
Now A = P + I = 6400 + 960 = 7360
This becomes the 'P' for second year
Interest for second year = 7360 * 15/100 = 1104 Rs.
Amount = P + I = 7360 + 1104 = 8464
Hence C.I for 2 years = A - P = 8464 - 6400 = Rs. 2064
[Or Just add the interests-- 960+1104 = Rs. 2064]
Alternatively, the formula can also be used.
C.I = P[ (1+ r/100)^n -1 ] = 6400[ (1 + 15/100)^2 - 1] = Rs. 2064
Hope it helps
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