Question

salma borrowed from mahila samiti a sum of rs.1875 to purchase a sewing machine. if the rate of interest is 4% per annum, what is the compound interest that she has to pay after 2 years​

Answer 1

Answer:

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

Answer 2

Given :-

Salma borrowed from mahila samiti a sum of rs.1875 to purchase a sewing machine. if the rate of interest is 4% per annum.

To find :-

What is the compound interest that she has to pay after 2 years ?

Solution :-

• Principal (P) = Rs.1875

• Rate of interest (R) = 4%

• Time (T) = 2 years

As we know that

→ A = P(1 + R/100)ⁿ

Where " A " is amount, " P " is Principal, " R " is rate of interest and " n " is time.

• According to the question

→ A = 1875(1 + 4/100)²

→ A = 1875(1 + 1/25)²

→ A = 1875(25 + 1/25)²

→ A = 1875(26/25)²

→ A = 1875 × 26/25 × 26/25

→ A = 75 × 26 × 26/25

→ A = 3 × 26 × 26

→ A = Rs.2028

Now,

→ Compound Interest = Amount - Principal

→ C.I = A - P

→ C.I = 2028 - 1875

→ C.I = Rs.153

Hence,

• Compound interest is Rs.153