Question

rekha borrowed rs. 40000 for 3 years at 10% per annum compound interest. calculate the interest paid by her for the second year

Answer 1

rupees borrowed = principal =P = Rs 40000
rate of interest = r = 10% p.a
number of times interest paid =n = 2(2years)

amount at the end of 2 year = A = P[(100+r)/100]^n

= 40000[(100+10)/100]^2
= 40000*110/100 *110/100
=4*110*110
A=Rs48400

interest paid for 2 years = A -P
=48400-40000
=Rs8400

Answer 2

Given,
P = Rs 40000
r = 10% p.a
t = 2(2years)
Amount at the end of 2 year = A = P[(100+r)/100]^n
= 40000[(100+10)/100]^2
= 40000*110/100 *110/100
=4*110*110
=Rs. 48400
We know A = Rs. 48400 and P = 40000
Interest paid for 2 years = A - P
=48400-40000
= 8400 rs.