How to find compound interest?
Please give me a example.
Answers
Answer:
Example: Let's say your goal is to end up with $10,000 in 5 years, and you can get an 8% interest rate on your savings, compounded monthly. Your calculation would be: P = 10000 / (1 + 0.08/12)(12×5) = $6712.10.
Answer:
The formula for compound interest is P (1 + r/n)^(nt), where P is the initial principal balance, r is the interest rate, n is the number of times interest is compounded per time period and t is the number of time periods.
Questions 1:Find the amount if Rs 20000 is invested at 10% p.a. for 3 years.
Solution: Using the formula:A= P [1+ R/100]n
A = 20000 [1 + (10/100)]3
On Solving, we get A = Rs. 26620
Question 2: Find the CI, if Rs 1000 was invested for 1.5 years at 20% p.a. compounded half yearly.
Solution: As it is said that the interest is compounded half yearly. So, the rate of interest will be halved and time will be doubled.
CI = P [1+(R/100)]n - P
CI = 1000 [1+(10/100)]3- 1000
On Solving, we get
CI = Rs. 331