If ₹2000 is invested for one year compounded half yearly, at 6%, then amount is... plz answer fast plz
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Maths > Comparing Quantities > Compound Interest
Comparing Quantities
Compound Interest
You have learned about the simple interest and formula for calculating simple interest and amount. Now, we shall discuss the concept of compound interest and the method of calculating the compound interest and the amount at the end of a certain specified period. We shall also study the population growth and depreciation of the value of movable and immovable assets.
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Solve
Questions
A man borrowed Rs.
20
,
000
for
2
years at
8
% per year compound interest. Calculate the compound interest of two years.
1 Verified answer
The compound interest on
R
s
.
100
for the first year is
5
p
.
c
.
and second year is
6
p
.
c
.
What is the interest after two years?
1 Verified answer
A sum of money becomes to 6000 in 3 years and 9000 in 6 years at C.I. Find the sum.
1 Verified answer
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Compound Interest
If the borrower and the lender agree to fix up an interval of time (say, a year or a half year or a quarter of a year etc) so that the amount (Principal + interest) at the end of an interval becomes the principal for the next interval, then the total interest over all the intervals, calculated in this way is called the compound interest and is abbreviated as C.I.
Compound interest at the end of a certain specified period is equal to the difference between the amount at the end of the period and original principal i.e. C.I. = Amount – Principal. In this section, we shall discuss some examples to explain the meaning and the computation of compound interest. Compound interest when interest is compounded annually.
Compound Interest
Example 1
Find the compound interest on Rs 1000 for two years at 4% per annum.
Solution: Principal for the first year =Rs 1000
S
I
=
P
×
R
×
T
100
S
I
f
o
r
1
s
t
y
e
a
r
=
1000
×
4
×
1
100
S
I
f
o
r
1
s
t
y
e
a
r
=
R
s
40
Amount at the end of first year =Rs1000 + Rs 40 = Rs 1040. Principal for the second year = Rs1040
S
I
f
o
r
2
n
d
y
e
a
r
=
1040
×
4
×
1
100
S
I
f
o
r
2
n
d
y
e
a
r
=
R
s
41.60
Amount at the end of second year,
A
m
o
u
n
t
=
R
s
1040
+
R
s
41.60
=
R
s
1081.60
Therefore,
C
o
m
p
o
u
n
d
i
n
t
e
r
e
s
t
=
R
s
(
1081.60
–
1000
)
=
R
s
81.60
Remark: The compound interest can also be computed by adding the interest for each year