find the compound interest on ₹16000 for 2 years at 5%
Answers
Answer:
Compound interest is ₹ 3448
Step-by-step explanation:
Principal (P) = ₹16, 000
Time (n) = 2 years
Rate (r) = 5%
Amount = Principal × (1 + r / 100) ^ n
= 16,000 × (1 + 5/100) ^ 2
= 16,000 × (105/100)²
= 16,000 × (21/20)²
= 16,000 × 21/20 × 21/20
= 17,640
C.I. = Amount – Principal
= 17,640 - ₹ 16,000
= ₹ 1640
Solution!!
The concept of compound interest has to be used here. The principal, rate of interest and time is given. We have to find the compound interest. Let's find it without the formula first!!
For 1st year
Principal (P) = Rs 16000
Time (T) = 2 year
yearRate of interest (R) = 5%
Interest = (P × R × T)/100
Interest = (16000 × 5 × 1)/100
Interest = Rs 800
Amount = Principal + Interest
Amount = Rs 16000 + Rs 800
Amount = Rs 16800
The amount in the 1st year is the principal of the 2nd year.
For 2nd year
Principal (P) = Rs 16800
Time (T) = 1 year
Rate of interest (R) = 5%
Interest = (P × R × T)/100
Interest = (16800 × 5 × 1)/100
Interest = Rs 840
Amount = Principal + Interest
Amount = Rs 16800 + Rs 840
Amount = Rs 17640
Compound interest = Rs 800 + Rs 840
Compound interest = Rs 1640
Now, let's solve this using formula!!
Principal (P) = Rs 16000
Time (n) = 2 year
Rate of interest (R) = 5%
Amount = P(1 + (R/100))²
Here 2 is the time (n).
Amount = 16000(1 + (5/100))²
Amount = 16000(105/100)²
Amount = 16000(21/20)²
Amount = 16000 × (21/20) × (21/20)
Amount = 160 × (21/2) × (21/2)
Amount = 40 × 21 × 21
Amount = Rs 17640
CI = Amount - Principal
CI = Rs 17640 - Rs 16000
CI = Rs 1640
Compound interest = Rs 1640