Question

Question 1.
(a) Calculate the amount and compound interest on Rs. 16000 for 3 years, the rates of interest for the
successive years being 6%, 7% and 8% respectively.

Answer 1

Answer:

For the first year,  on interest being compounded at R=10 %, we have 

Amount=P(1+100R)N=16,000×(1+10010)1=16,000×1.1=Rs17,600

For the second year,  P=Rs17,600  on interest being compounded at R=14 %, we have 

Amount=P(1+100R)N=Rs17,600×(1+10014)1=Rs17,600×1.14=Rs20,064 

For the third year,  P=Rs20,064  on interest being compounded at R=15 %, we have 

Amount=P(1+100R)N=Rs20,064×(1+10015)1=Rs20,064×1.15=Rs23,073.60 

So, Total amount =Rs23,073.60

And TotalC.I.=A−P=Rs23,073.60−Rs16,000=Rs7,073