Question

find compound interest paid when a sum of 10000 Rupees is invested for 1 year and 3 months at 818 and 5% per annum compounded annually

Answer 1

Principal Amount= P =10000

Rate of Interest= i = 5%

No.of years =n= periods=1year 3months = 1.25years

1 year-5% ; 0.25years = 1.25%

A = compounded Amount

we know That

A= P((1+i)^n

= 10000(1+5/100)^1

= 10000(1+0.05)

=10000(1.05)

=10500 = for 1 year..

then for remaining 3 months..

P will be 10500

n = 1 period/3months

A= P((1+i)^n

= 10500(1+)^1

= 10500(1+1.25/100)

=10500(1.0125)

=10,631.25.. is the compounded Amount..

then compound interest will be..

Compounded amount - Principal Amount..

= 10631.25 - 10000

=631.25