Find the amount and Compound Interest on Rs.6,000 in 3 years if the rate of interest is 5% for first year, 4% for the second year and 3% for the third year
Answers
Answer:
the amount and Compound Interest on Rs.6,000 in 3 years if the rate of interest is 5% for first year, 4% for the second year and 3% for the third year
1st year calculation
Calculate:
Total P+I (A)
Where: A = P(1 + r/n)^(nt)
Principal (P): $ 6,000.00
Rate (R): % annual 5
Compound (n): Compounding Annually (1/Yr)
Time (t in years): 1
Answer:
A = $ 6,300.00
A = P + I where
P (principal) = $ 6,000.00
I (interest) = $ 300.00
2nd year calculation
Calculate:
Total P+I (A)
Where: A = P(1 + r/n)^(nt)
Principal (P): $ 6,300.00
Rate (R): % annual 5
Compound (n): Compounding Annually (1/Yr)
Time (t in years): 1
Answer:
A = $ 6,615.00
A = P + I where
P (principal) = $ 6,300.00
I (interest) = $ 315.00
3rd year calculation
Calculate:
Total P+I (A)
Where: A = P(1 + r/n)^(nt)
Principal (P): $ 6,615.00
Rate (R): % annual 5
Compound (n): Compounding Annually (1/Yr)
Time (t in years): 1
Answer:
A = $ 6,945.75
A = P + I where
P (principal) = $ 6,615.00
I (interest) = $ 330.75
So, final amount = 6945.75 and
Compound Interest = 945.75