Question

Practice Set 14.1
and the compound
I find the amount
Interest
p-2000
R_ 5
N _
2​

Answer 1

Given:

➡ Principal amount = Rs.2000

➡ Rate of interest = 5%

➡ Time period = 2 years

➡ Mode of compounding =  Annually

To Find:

The compound interest when compounded annually.

Solution:

Here, we need to find compound interest when the principal amount is compounded annually. For finding the amount, the formula used must be as follows:

$\sf{\implies\:A=P\left(1+\dfrac{r}{100}\right)^n}$

Substituting the values into the equation:

$\sf{\longrightarrow\:A=2000\left(1+\dfrac{5}{100}\right)^2}$

$\sf{\longrightarrow\:A=2000\times\dfrac{21}{20}\times\dfrac{21}{20}}$

$\sf{\longrightarrow\:A=5\times21\times21}$

$\sf{\longrightarrow\:Amount=Rs.\:2205}$

Now, we need to find the interest amount. This can be found out using the formula which is given below:

$\sf{\implies\:C.I=A-P}$

Amount = Rs.2205

Principal amount = Rs.2000

Substituting the values into the equation:

$\sf{\longrightarrow\:C.I=2205-2000}$

$\bf{\longrightarrow\:C.I=Rs.205}$

The compound interest amount is Rs.205.