Question

Maria invested rupees 8000 in a business she could be paid interest at 5% per annum compounded annually find the amount standing to her credit at the end of second year and the interest for the third year

Answer 1

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


Amount (A) = 8000*[1+5/100]^2


= Rs. 8,820


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

Amount (A) = 8820*[1+5/100]


= Rs. 9,261


Interest for 3rd year = A – P


= Rs. 9,261 – Rs. 8,820 = Rs. 441