The sum of money that yield a compound of 420 during the time 2nd year at 5% per annum?
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Given" Sum of money that yield a compound interest of 420 at the end of second year at 5%per annum"
Rate of interest= i = 5%
Time = n =2 years
Compound Interest= 420
We know that
Compound Interest = P[(1+i)^n - 1 ]
420 = P[ (1 + 0.05)^2 - 1]
420 = P[ (1.05)^2 -1]
420 = P[ (1.1025 -1 ]
420 = P ( 0.1025)
420/0.1025 = P = 4097.56 = Principal amount..
Rate of interest= i = 5%
Time = n =2 years
Compound Interest= 420
We know that
Compound Interest = P[(1+i)^n - 1 ]
420 = P[ (1 + 0.05)^2 - 1]
420 = P[ (1.05)^2 -1]
420 = P[ (1.1025 -1 ]
420 = P ( 0.1025)
420/0.1025 = P = 4097.56 = Principal amount..
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