Question

find the compound amount and compound interest on the principle of 20,000 borrowed at 6 percent compounded annually for 3 years

Answer 1

first we have to use formula of amount and then subtract full solution is in attachment answer is 3820.32

Answer 2

Answer:

Effect of compounding (interest on interest) totals $220.32$over the three-year period, approximately $1.1 \%.$

Step-by-step explanation:

Given: P=20,000 Rs. n=3 years, R=6

$Amount(A)=P(1+\frac{R}{100} )^{n}$

$Amount(A)=20000(1+\frac{6}{100} )^{3}$

$20,000*(1.06)(1.06)(1.06)\\20,000*1.191016\\23,820.32$

Note that if calculated using simple interest (not compounded), the balance would be:

$20,000*1.18=23,600$

Thus, the effect of compounding (interest on interest) totals $220.32$over the three-year period, approximately $1.1 \%.$

Reference Link

• https://brainly.in/question/33628251