Question

Find interest Find CI on a sum of rs 8000 for 2 years at 5% per annum compounded annually

Answer 1

Answer:

CI = ₹820

Step-by-step explanation:

There are two ways to do this question:

1. Formula Method:

CI = P x [(1 + r/100)² - 1]

= 8000 x [(1 + 5/100)² - 1]

= 8000 x [(1 + 1/20)² - 1]

= 8000 x [(21/20)² - 1]

= 8000 x (441/400 - 400/400)

= 8000 x 41/400

= 41 x 20

= ₹820

2. Year by Year method:

I for 1st year =

PRT/100

= 8000 x 5 x 1/100

= ₹400

Therefore, P for 2nd year = P₁ + I₁

= 8000 + 400

= ₹8,400

I for 2nd year = P₂RT/100

= 8400 x 5 x 1/100

= ₹420

Therefore, Total CI = 420 + 400

= ₹820

Hope this Helps!