Question

Find the compound interest on 4000 for 5 years at 10% p.a.
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Answer 1

⚽ Principal (P) = Rs.4000

✨ Since the interest is compounded yearly the number of conversion periods in 5 years are 5.

✨ Also the rate of interest per conversion period (12 months) is 10% × 5 = 50% (0.5 in decimal) .

⚽ Thus the amount $\sf{A_n}$ (in Rs.) is given by

$\checkmark~\sf\purple{A_n~=~P~(1~+~i)^n~}$

$\longmapsto~\rm{A_n~=~4000~(1~+~0.5)^3~}$

$\longmapsto~\rm{A_n~=~4000\times{3.375}~}$

$\longmapsto~\rm{A_n~=~Rs.13500~}$

✨ The compound interest is therefore,

→ Rs. (13500 - 4000)

→ Rs.9500

Answer 2

$\huge\red{\boxed{\blue{\mathcal{\overbrace{\underbrace{\fcolorbox{blue}{aqua}{\underline{\red{ANSWER}}}}}}}}}$

$an = 400(1 + 0.5) \\ an = 400 \times 375 \\ = 13500 \\ hence \\ 13500 - 4000 = 9500$