The compound interest on Rs 100,000 at 20 % p.a for 2 years and 3 months is
Answers
Step-by-step explanation:
Interest for 1 year = 20% = 20/100 = 1/5
Interest for 3 months = 20*3/12 % = 60/1200
= 1/20
A = P * (1 + r/100)^n
= 100000 * (1 + 1/5)² * ( 1 + 1/20)
= 100000 * (6/5)² * (21/20)
= 100000 * (36/25) * (21/20)
= 151200
CI = A - P = 51200
ALTERNATE METHOD (Tree method)
Interest for 1 year = 20% = 20/100 = 1/5
Interest for 3 months = 20*3/12 % = 60/1200
= 1/20
1st year 2nd year. 3rd year(3months)
(P×1/5). (P×1/5). (P×1/20)
100000. 20000. 20000. 5000
20000*1/5. 20000*1/20
20000*1/20
4000*1/20
CI = 20000*2 + 5000 + 4000 + 1000*2 + 200
= 51200