The compound interest on $3000 invested for 2 years at 5% per annum is
Answers
Step-by-step explanation:
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Answer:
The compound interest on rs 3000 for 2 years at 5% per annum compounded annually is rs 307.5
Step-by-step explanation:
The compound interest formula is as follows:
A = P ( 1 + r/n) ⁿ
Where Amount accrued after given years
P is the amount borrowed/lend
r the interest rate (in decimal)
n = number of years
In this question:
A = ?
P = rs 3000
r = 0.05 (5% in decimal)
n = 2 years
Input the figures in the compound interest formula and find the compound interest as follows:
A = P ( 1 + r/n) ⁿ
A = 3000 ( 1 + 0.05/1) ²
A = 3000 (1 + 0.05)²
A = 3000(1.05)²
A = 3000 × 1.1025
A= 3307.5
Therefore the amount accrued is rs 3307.5
Subtract the principal which rs 3000 from the amount accrued to find the compound interest.
Compound interest = 3307.5 - 3000
= rs 307.5