Question

Find the amount of Rs. 6,250 at 8% per annum compounded annually for 2 years. Find the compound interest.

Answer 1

Answer:

Given:

Present value =₹ 6250

Interest rate= 8 % per annum

Time =1 year compounded half-yearly

To find the amount we have the formula,

Amount (A)=P(1+(r/100))

n

where P is present value, r is rate of interest, n is time in years

Now substituting the values in above formula we get,

∴A=6250(1+(8/2)/100)

2

⇒A=6250(1+4/100)

2

⇒A=6250(1+1/25)

2

⇒A=6250(26/25)

2

⇒A=10×26×26

⇒A=₹ 6760

∴ Compound interest =A–P

=6760–6250=₹ 510.