Find the compound interest for 2 years if 7000 is invested at 5% p.a
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Answer:
Given
A person invest on simple interest = Rs. 7000
A person invest on compound interest = Rs. 10,000
Rate of Interest = 8%
Formula used.
Simple interest = Principal × Time × Rate/100
Amount = Principal(1 - Rate/100)2
Calculation
Simple Interest = 7000 × 8 × 2/100 = Rs 1120
Amount = 10000(1 + 8/100)2
⇒ 10000 × 27/25 × 27/25
⇒ Rs. 11,664
Compound Interest = 11664 - 10000 = 1664
Total Interest earned by person = 1664 + 1120 = Rs. 2784
∴ The required answer is Rs 2784
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hope this may help you thanks
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