Question

Rs. 1200 is lent at compound interest of 5% per annum for 2 yrs. Find the amount after 2 yrs.

Answer 1

Concept

Compound interest is the interest on the deposit calaculated based on both the principal amount and the accumulated interest from previous time.

Given

1) Rs. 1200 is lent

2) 5% interest rate

3) Time 2 years

Find

Amount after 2 years

Solution

After First year

Amount = interest * Initial amount + Initial amount

= 5% * 1200 + 1200

= 5/100 * 1200 + 1200

= 60 + 1200

= 1260

For second year the initial amount will be 1260

Final amount = interest * initial amount + intial amount

= 5% * 1260 + 1260

= 5/100 * 1260 + 1260

= 0.05 * 1260 + 1260

= 63 + 1260

= 1323

The amount after 2 years will be Rs 1323.

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Answer 2

Answer:

1323 is the amount after 2 yrs.

Step-by-step explanation:

Compound interest exists as the addition of interest to the principal sum of a loan or deposit, or in other phrases, interest on principal plus interest.

Given

• 1) Rs. 1200 is lent
• 2) 5% interest rate
• 3) Time 2 years

To Find

Amount after 2 years

After First year

Amount = interest * Initial amount + Initial amount

= 5%$* 1200 + 1200$

= $5/100 * 1200 + 1200$

= 60 + 1200

= 1260

For second year the initial amount will be 1260

Final amount = interest * initial amount + initial amount

= 5% $* 1260 + 1260$

=$5/100 * 1260 + 1260$

= $0.05 * 1260 + 1260$

= 63 + 1260

= 1323

The amount after 2 years will be Rs 1323.

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