Question

find compound interest paid when a sum of 10,000 is invested for 1 year 3 months at 8 1/2percent per annum compounded annually.​

Answer 1

Solution:

Given and Find:

Find compound interest paid when a sum of 10,000 is invested for 1 year 3 months at 8 1/2 percent per annum compounded annually.

Calculations:

Let us assume that Nayanshreyas first converted the time in years.

→ 1 year 3 months = 1 • 3/12 year = 1 • 1/4 years

Nayanshreyas tried adding the values in the known formula .

→ A = 10,000 ( 1 + 17/200 )^ 1 ¼

Now, I want to find the amount of the whole part, for 1 year using this as principal we get SI (Simple Interest) for 1/4 year.

→ A = 10,000 ( 1 + 17/200 )

→ 10,000 × 217/200 = 10,850

For next 1/4 year, I want to find the simple interest on 10,850 rupees for 1/4 year.

→ SI = 10,850 × 1/4 × 17 / 100 × 2

→ 10850 × 1 × 17 / 800 = 230.56

Interest if first year = 10850 - 10,000 = 850

Interest for next 1/4 year = 230.56

→ 850 + 230.56 = 1080.56

Therefore, 1080.56 is the total compound interest.

#AnswerWithQuality

#BAL