Question

find the amount and the compound interest on 8000 5% per annum for 2 years compounded annually

Answer 1

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Answer 2

It is given that

Principal = ₹ 8000

Rate of interest = 5% p.a.

We know that

Interest for the first year = Prt/100

Substituting the values

= (8000 × 5 × 1)/ 100

= ₹ 400

So the amount for the first year or principal for the second year = 8000 + 400 = ₹ 8400

Here

Interest for the second year = (8400 × 5 × 1)/ 100

So we get

= ₹ 420

We know that

Amount after the second year = 8400 + 420

= ₹ 8820

Total compound interest = 8820 + 8000

= ₹ 820