Question

Maria invested 8,000 in a business . She would be paid interest at per annum compounded annually. Find
1. The amount credited against her name at the end of the second year
2. The interest for the 3rd year ​

Answer 1

Step-by-step explanation:

(i) Here, Principal (P) = Rs. 8000, Rate of Interest (R) = 5%, Time (n) = 2 years.

Amount (A) = P\left(1+\frac{R}{100}\right)^n

= 8000\left(1+\frac{5}{100}\right)^2

= 8000\left(1+\frac{1}{20}\right)^2

= 8000\left(\frac{21}{20}\right)^2

= 8000\times\frac{21}{20}\times\frac{21}{20}

= Rs. 8820

(ii) Here, Principal (P) = Rs. 8000, Rate of interest (R) = 5%, Time (n) = 3 years.

Amount (A) = P\left(1+\frac{R}{100}\right)^n

= 8000\left(1+\frac{5}{100}\right)^3

= 8000\left(1+\frac{1}{20}\right)^3

= 8000\left(\frac{21}{20}\right)^3

= 8000\times\frac{21}{20}\times\frac{21}{20}\times\frac{21}{20}

= Rs. 9,261

Interest for 3rd year = A - P

= Rs. 9,261 – Rs. 8,820 = Rs. 441