Question

Debali invests a sum of rs16000 on a share. In first two years he got successive increment at rate of 5% but in next two years he loss 5% finally total loss or profit he got is

Answer 1

Given,

The principal amount invested by Debali = Rs.16000/-

Debali gets an increment of 5% per annum for the first 2 years.

Later on, Debali gets a loss of 5% per annum for the next 2 years.

To Find,

Profit or Loss Debali got at the end of 4 years.

Solution,

The formula for Compound Interest = $P(1+\frac{r}{100} )^{n}$

Let us say P = 16000

r = 5

n = 2

Thus the total CI = $16000(1+\frac{5}{100} )^{2}$ = 17640

Thus the principal amount at the end of the first 2 years = Rs.17640/-

Now since Debali gets a loss of 5% for the next 2 years

⇒ So the 3rd year interest loss =  $17640*(5/100)= 882$

Thus principal after 3rd year = 17640 - 882 =  16758

Loss in the forth year = $16758*(5/100) = 837.9$

Thus the principal amount at the end of 4th year = 16758-837.9 = 15920.1

Thus Debali had a loss = 16000 - 15920.1 = 79.9

Henceforth, Debali had a loss of Rs.79.9/- at the end of 4 years.

Answer 2

Concept:

Compound interest is the sum of interest to the principal sum of a loan or deposit, or in other words, interest on principal plus interest.

Principal is the amount deposited to the bank at the begining.

Amount is the sum of money recieved from the bank after maturity

The formula for Compound Interest = P(1+r/100)ⁿ-P

Principal is the amout deposited Given,

Principal = Rs.16000

Debali gets an increment of 5% per annum for the first 2 years.

Later, Debali gets a loss of 5% per annum for the next 2 years.

Find:

Profit or Loss Debali got at the end of 4 years.

Solution:

The formula for Compound Interest = P(1+r/100)ⁿ-P

P = 16000

r = 5

n = 2

total Amount  after CI fro 2 years = 16000(1+5/100)² =Rs 17640

Thus the principal amount at the end of the first 2 years = Rs17640

Now Debali gets a loss of 5% for the next 2 years

⇒ So the 3rd year interest loss = 17640x5/100=Rs 882

Thus principal after 3rd year = 17640 - 882 =  Rs 16758

Loss in the fourth year =  16758x5/100= Rs 837.9

the principal amount at the end of 4th year = 16758-837.9 = 15920.1

Debali had a loss = 16000 - 15920.1 = 79.9

Therefore, Debali had a loss of Rs.79.9 at the end of 4 years

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