Vivek has taken a loan of Rs 8000 to start a business at a rate of 10 p c p a. after two years how much compound interest will he have to pay?
Answers
Given info : Vivek has taken a loan of Rs. 8000 to start a business at a rate of 10 % per annum.
To find : the amount of compound interest he will have to pay after two years is ..
solution : principal, P = Rs. 8000
rate, r = 10 % per annum
time, n = 2 years
using formula,
C.I = P(1 + r/100)ⁿ - P
= 8000(1 + 10/100)² - 8000
= 8000[(1 + 1/10)² - 1]
= 8000[(1.1)² - 1]
= 8000[1.21 - 1]
= 8000 × 0.21
= 1680
Therefore Vivek will have to pay Rs. 1680 compound interest after two years.
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