Question

Find amount and compound interest if Principal = Rs 6250, at the rate of 4% p.a. compounded annually for 2 years.​

Answer 1

Given

• Principal = Rs. 6250
• Time = 2 years
• Rate = 4%

Explanation

As We know that:-

$\maltese {\large{\pmb{\boxed{\sf{ Amount = P \left( 1 + \dfrac{r}{100} \right)^n }}}}}$

$\colon\implies{\sf{ Amount = 6250 \left( 1 + \dfrac{4}{100} \right)^2 }} \\ \\ \\ \colon\implies{\sf{ Amount = 6250 \left( \dfrac{104}{100} \right)^2 }} \\ \\ \\ \colon\implies{\sf{ Amount = 6250 \left( \dfrac{26}{25} \right)^2 }} \\ \\ \\ \colon\implies{\sf{ Amount = 6250 \times \dfrac{26}{25} \times \dfrac{26}{25} }} \\ \\ \\ \colon\implies{\sf{ Amount = \cancel{ \dfrac{4225000}{ 625} } }} \\ \\ \\ \colon\implies{\sf{ Amount = Rs. \ 6760 }}$

So, The Amount of the transaction is ₹6760 .

We also Know that:-

Now, We can Subtract Principal from Amount to get Interest as:-

${\pmb{\boxed{\sf\green{ Amount = Principal + Interest }}}} \\ \\ \colon\implies{\sf{ Amount - Principal = Interest }} \\ \\ \colon\implies{\sf{ 6760 - 6250 = Interest }} \\ \\ \colon\implies{\sf{ Interest = Rs. \ 510 }}$

Hence,

${\underline{\sf{ The \ Compound \ Interest \ of \ the \ transaction \ is \ Rs. \ 510. }}}$