Question

How much will rs. 25000 amount to in 2 years at compound interest, if the rates for the successive years be 4 and 5 % p.a.

Answer 1

P= rs.25000

R1 = 4%

R2=5%

n= 2 years

A = P(1+R1/100)(1+R2/100)

  = 25000(1+4/100)(1+5/100)

  = 25000(1+1/25)(1+1/20)

  = 25000{(25+1)/25}{(20+1)/20}

 = 25000(26/25)(21/20)

 = 1000*26(21/20)

 = 50*26*21

 = rs. 27300