Question

How much compound interest is earned by investing ₹20000 for 6 years at 5% per annum compounded annually?

Answer 1

Amount, A = P[1+R/100]ⁿ

substituting the values,

A= 20000[1+5/100]⁶
  =20000[105/100]⁶
  =26801.90

So, CI = A- P 
           = 26801.9 - 20000 = Rs 6801.90

Answer 2

Answer:

Step-by-step explanation:

Given :-

Principal ( P ) = Rs 20000

Time ( t ) = 6 years

Rate of interest ( r ) = 5%

To Find :-

Compound interest

Formula to be used :-

Amount = P( 1 + r/100 )^n

Compound interest = A - P

Solution :-

A = p (1 + r/100)^n

= 20000 (1 + 5/100)⁶

= 20000 (105/100)⁶

= 20000 × 1.3400956

= 26801.91

Compound interest = A-P

Compound interest = 26801.91 - 20000

Compound interest = 6801.91

Hence, compound interest is earned  is Rs 6801.91