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A sum of Rs. 50,000 is borrowed and the rate of interest is 10% per annum. What is the compound interest for 2 years?

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Answer 1

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Formula of Compound Interest:

     First, we have to find Amount: $Amount\:=\:P(1\:+\:\frac{R}{100})^T$$Amount\:=\:50000(1\:+\:\frac{10}{100})^2$

$Amount=50000(100+\frac{10}{100})^2$

$Amount= 50000(\frac{110}{100})^2$

$Amount=50000\times\frac{110}{100}\times\frac{110}{100}$

$Amount=5\times110\times110$

$Amount=Rs. \: 60,500$

Now, we have to Reduce Amount from Pricipal:

$Compound\:Interest= Rs. (60500-50000)$

$Compound\:Interest=Rs.\:10,500$

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