Question

The compount interest on Rs. 5000 at 4% per annum for 2 years compounded annually is *

Answer 1

Given :

• The compount interest on Rs. 5000 at 4% per annum for 2 years

To find :

• compounded annually

Solution :

we have

p = Rs 5000

R = 4%

n = 2years

A = P(1 + R/100)^n

= 5000(1 + 4/100)²

= 5000 × 26/25 × 26/25

= Rs 5408

compound interest = 5408 - 5000

= 408