Question

varun borrowed Rs 40000 at 5% p.a compound interest after 2 years, he repaid

Answer 1

★ Solution :-

First, we should find the amount he paid by it's formula. The formula of amount is given below,

Amount :-

$\sf \leadsto Amount = Principle \bigg(1 + \dfrac{Rate}{100} \bigg)^{Time}$

$\sf \leadsto 40000 \bigg(1 + \dfrac{5}{100} \bigg)^{2}$

$\sf \leadsto 40000 \bigg(1 + \dfrac{1}{20} \bigg)^{2}$

$\sf \leadsto 40000 \bigg( \dfrac{20 + 1}{20} \bigg)^{2}$

$\sf \leadsto 40000 \bigg( \dfrac{21}{20} \bigg)^{2}$

$\sf \leadsto 40000 \bigg( \dfrac{{21}^{2}}{{20}^{2}} \bigg)$

$\sf \leadsto 40000 \bigg( \dfrac{441}{400} \bigg)$

$\sf \leadsto \dfrac{40000 \times 441}{400} = \dfrac{17640000}{400}$

$\sf \leadsto \cancel \dfrac{17640000}{400} = 44100$

Now, we can find the compound interest.

Compound interest :-

$\sf \leadsto CI = Amount - Principle$

$\sf \leadsto 44100 - 40000$

$\sf \leadsto Rs.4100$

Therefore, the compound interest is ₹4100.