Question

how much compound interest is earned by investing rs.20,000 for 6 years at 5% per annum compounded annually

Answer 1

p=20000
n=6 yrs
r=5
A= p (1+r/100)n
= 20000 (1+5/100)6
=20000 (105/100)6
=20000×1.3400956
=26801.91

CI= A-P
=26801.91 - 20000
=6801.91

Answer 2

Answer: Compound interest would be Rs. 6801.90.

Step-by-step explanation:

Since we have given that

Principal = Rs.20000

Rate of interest = 5%

Number of years = 6 years

As we know that

Amount is given by

$P(1+\dfrac{r}{100})^n\\\\=20000(1+\dfrac{5}{100})^6\\\\=200000(1.05)^6\\\\=26801.90$

So, Compound interest = Amount - Principal

$C.I.=26801.90-20000\\\\C.I.=6801.90$

Hence, compound interest would be Rs. 6801.90.