find the interest earned on 5000 for 2 years at 12 % per annum compounded annually.
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Answer:
☆ Solution ☆
The required compound interest is ₹ 1272.
To Find :-
The compound interest.
Step-by-Step-Explaination :-
We that the amount A at the end of n years at the rate of R% per annum when the interest is compounded annually is given by
A = P ( 1 + R/100 )^ n
Here, Principal ( P ) = 5000 , R = 12 % p.a. and n = 2 years
Therefore,
Amount ( A ) after 2 years
= ₹ 5000 ( 1 + 12/100 )²
= ₹ 5000 ( 112/100 )²
= ₹ 5000 × 112/100 × 112/100 = 6272
Now,
Compound Interest
= Amount (A) - Principal (P)
= ₹ 6272 - ₹5000
= ₹ 1272
Hence,
The required compound interest is ₹ 1272.
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