Question

Find the amount and compound interest on a sum of 8,000 at 5% per annum for
three years compounded annually

Answer 1

S O L U T I O N :

Given :

• Principal (P) = Rs. 8000
• Rate of interest (R) = 5%
• Time (t) = 3 years

To Find :

• Amount and compound interest.

Explanation :

We know that,

A = P(1 + R/100)^t

Here,

• A = Amount
• P = Principal
• R = Rate of interest
• t = Time

[ Put the values ]

↪ A = 8000(1 + 5/100)³

↪ A = 8000(100 + 5/100)³

↪ A = 8000(105/100)³

↪ A = 8000 × 105/100 × 105/100 × 105/100

↪ A = 80 × 105 × 1.05 × 1.05

↪ A = 8400 × 1.1025

⟹ A = Rs. 9261

Now,

Compound interest = Amount - Principal

[ Put the values ]

↪ C.I = 9261 - 8000

⟹ C.I = Rs. 1261

Therefore,

The amount and compound interest is Rs. 9261 and Rs. 1261 respectively.