Question

Sara deposit rs 4000 at bank at an interest rate 4.5% per year . how much interest will she earn at the end of 3 years?​

Answer 1

Amount Shyam will get from the bank after 2 years -

-Returns = P (1 + r)^t

-Returns = 4000 (1 + 9.5/100)^2

-Returns = 4000 × (1.095)^2

-Returns = 4000 × 1.2

-Returns = 4000 × 1.199

-Returns = 4796 Rs

-Compound interest for 2 years is -

-Compound interest = Returns - Principal

-Compound interest = 4796 - 4000

-Compound interest = 796 Rs

-Hence, Shyam will get 4796 Rs after 2 years of -which 796 is compound interest.