Find the compound interest accruing annually on 5000 for 3 years at the rate of 10 p.c.p.a. Find what the loan amounts to at the end of 2 years and 3 years?
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Answer:
Step-by-step explanation:
Principal = 5000
Time = 3 years
Rate = 10 % p.a
Compound interest= P× R ×T/100
= 5000 × 1 × 10 /100
= 500 ( Amount of the 1st year)
Principle of the 2 nd year will be 5000 + 500 = 5500
Compound interest= P× R ×T/100
= 5500 × 1 × 10 /100
= 550
Principle of the 3 rd year will be 5500 + 550 = 6050
Compound interest= P× R ×T/100
= 6050 × 1 × 10 /100
= 605
Amount after 3 years. 6050 + 605 = 6655
Compound interest = 6655 -5000 = 1655
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