Question

If the compound interest on a certain sum for first year at 5% per annum compounded is 25 then total interest at the end of second year is

Answer 1

Answer:

Interest = Rs.51.25

Step-by-step explanation:

Let the Principal be P. At 5% compound interest for 1 yr the interest will be 25.

Hence, 25 = P ((1+5/100)-1)

25 = P (1.05-1)

0.5P = 25

P = 500

For 2 yrs the interest will be = 500 * ((1+5/100)²-1)

= 500 * (1.1025-1) = 500 * 0.1025 = 51.25