Question

FIND THE COMPOUND INTREST ON RS 8000FOR 2 YEARS AT 12 PERCENT PER ANNUM

Answer 1

Question.

What is the compound interest on Rs. 8,000 for 2 years at 12% P.A. if the interest is compounded annually

Solution.

☞The formula used in the compound interest calculator is

A = $\sf\green{P (1+r/n)^(nt)}$

A = the future value of the investment.

P = the principal investment amount.

r = the interest rate (decimal)

n = the number of times that interest is compounded per period.

☞Accordingly

A = $\sf\green{8000 (1 + 0.12×1)^2}$

A = $\sf\green{8000 (1.12)^2}$

A = $\sf\green{8000×1.12×1.12}$

A = $\sf\green{10,035.2}$

☞The amount with compound interest after $\sf\red{2}$year will he ₹$\sf\green{10035.2}$

☞Compound interest = $\sf\red{10035.2-8000}$= ₹$\sf\green{2035.2}$