Question

if rupees 20000 is deposit for 3 years at 5% compounded annually then what will be the principal for the second year

Answer 1

As we know Compound interest of the 1st year is the principal of 2nd year hence

P=20,000

R=5%

Time=1year

Ci=p (1+r/100-1)^n (n=time)

Ci =20,000 (1+5/100 -1)

20000 (100+5/100 -1)

20000×105/100-1

=Rs 1000/-

2nd year P(principal)=20000+1000

=Rs21000/-

Answer 2

Answer:

The principal for the second year is Rs. 21000.

Step-by-step explanation:

In compound interest the amount of previous years it the principle of next year.

Principal(P)=20,000

Time(t) = 3 years

Rate of interest (r)= 5%=0.05

The formula for amount is

$A=P(1+r)^t$

The principal for the second year  is equal to the amount after 1 year.

$A=20000(1+0.05)^1$

$A=20000(1.05)$

$A=21000$

Therefore the principal for the second year is Rs. 21000.