Question

Find the compound interest on Rs. 20,000 in 2 years at the rate of 15 p.c.p.a.​

Answer 1

Answer:

Rs.2,000

Step-by-step explanation:

Principal for the first year = Rs. 20,000, rate = 5%, T = 1 year.

Interest for the first year =  

$\frac{20,000*1*5}{100}$  

​  

=Rs.1,000 (using simple interest formula I=  

$\frac{P*T_{1}*R }{100}$ ).

Principal for the second year = Rs. 20,000+1,000=Rs. 21,000.

Interest for the second year =  

$\frac{21,000*5}{100}$

​  

=Rs.1,050

Amount after 2 years = Rs. 21000 + 1050 = Rs. 22,050.

Compound interest = amount - principal = Rs. 22,050 - Rs. 20,000 = Rs. 2,050.

Hence the compound interest after 2 years is Rs. 2,050.

Simple interest on Rs. 20,000 for 2 years at the rate of 5% is

I=  $\frac{20,000*2*5}{100}$   =Rs.2,000.

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