Question

Find compound interest
Find the compound interest and the total amount after four years if the interest is compounded annually.
Principal = 26250
Rate of interest - 20% per annum
Total amount =
Compound interest=*​

Answer 1

Given :

Principle : ₹26250

Rate of interest : 20%

Time : 4 years

To find :

The compound interest and the total amount to be paid.

Solution :

First, we should find the compound interest.

Compound interest :

$\sf \dashrightarrow Amount = Principle \bigg( 1 + \dfrac{Rate}{100} \bigg)^{Time}$

$\sf \dashrightarrow 26250 \bigg( 1 + \dfrac{20}{100} \bigg)^{4}$

$\sf \dashrightarrow 26250 \bigg( \dfrac{100 + 20}{100} \bigg)^{4}$

$\sf \dashrightarrow 26250 \bigg( \dfrac{120}{100} \bigg)^{4}$

$\sf \dashrightarrow 26250 \bigg( \dfrac{6}{5} \bigg)^{4}$

$\sf \dashrightarrow 26250 \bigg( \dfrac{6^4}{5^4} \bigg)$

$\sf \dashrightarrow 26250 \bigg( \dfrac{1296}{625} \bigg)$

$\sf \dashrightarrow 42 \bigg( \dfrac{1296}{1} \bigg)$

$\sf \dashrightarrow \dfrac{42 \times 1296}{1}$

$\sf \dashrightarrow Compound \: Interest = 54432$

Now, we can find the total amount.

Total amount :

$\sf \dashrightarrow Compound \: interest - Principle$

$\sf \dashrightarrow 54432 - 26250$

$\sf \dashrightarrow Rs.28182$

Hence, the Compound interest and Total amount are ₹54432 and ₹28182 respectively.