Question

In case of Compound Interest.
Find the present worth and true discount on a bill of Rs.338 due 2 years hence at 4% compound interest
compounded annually.
(Ans. * 312. 50; * 25. 50]​

Answer 1

Answer:

In case of Compound Interest. Find the present worth and true discount on a bill of Rs.338 due 2 years hence at 4% compound interest compounded annually. (Ans. * 312. 50; * 25. 50]

Answer 2

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• We know that, first we have to find the total amount to pay. .

$ \sf{Amount = P(1 + \frac{R}{100})^{T}}$

Thus,

$\sf{ = 338(1 + \frac{4}{100} {)}^{2}}$

$\sf{ = 338(1 + \frac{4}{100} {)}^{2} }$

$\sf{ = 338(100 + \frac{4}{100} {)}^{2} }$

$\sf{ = 338( \frac{104}{100} {)}^{2} }$

$\sf{ = 338( \frac{26}{25} {)}^{2} }$

$\sf{ = 338 \times \frac{26}{25} \times \frac{26}{25} }$

$\sf{ = 338 \times 1.04 \times 1.04}$

$\sf{ = 338 \times 1.0816}$

$\sf{ = 365.5808}$

• Now, we have to find compound interest;

$ \sf{Compound~Interest = Amount - Principal}$

$\sf{ = 365.5808 - 338}$

$\bf \red{ = 27.5808}$

• Hence, compound interest will be Rs. 27.5808.