Question

Q. If Rs1875 amounts to Rs 2028 in 2 years at compound interest at a certain rate, then how much will Rs875 amount to in 2 years at same rate? ​

Answer 1

Principal for the first year = Rs 1875

Rate of interest = 4% p.a.

Interest for the first year = Rs (1875 × 4 × 1) / 100

= 75

Amount at the end of first year = Rs 1875 + Rs 75

= Rs 1950

Principal for the second year = Rs 1950

Interest for the second year = Rs (1950 × 4 × 1) / 100

= 78

Amount at the end of second year = Rs 1950 + Rs 78

= Rs 2028

Hence,

Compound interest paid by Salma = Final amount – (original) Principal

= Rs 2028 – Rs 1875

= Rs 153