Question

what will be the amount and compound interest if 5000 rupees in invested at 8% annum 2 years

Answer 1

Solution :

principal ( p ) = Rs 5000

Rate of interest ( r ) = 8% p.a

Time ( t ) = 2 years

Number of times Interest paid ( n )= 2


Amount ( A ) = p [ 1 + r/100 ]ⁿ

=> A = 5000 [ 1 + 8/100 ]²

= 5000 [ 1 + 2/25 ]²

= 5000 [ ( 25 + 2 )/25 ]²

= 5000 ( 27/25 )²

= ( 5000 × 27 × 27 )/( 25 × 25 )

= 5832

Therefore ,

A = Rs 5832

Compound interest = A - P

= Rs 5832 - Rs 5000

= Rs 832

••••

Answer 2

Ist case :
Principal = 5000
Rate = 8%
Time = 1yr
S. I = PRT/100 = 5000×8×1 /100=400
Amount = p+I = 5000+400 = 5400

2nd case :
Principal = 5400
Rate = 8%
Time = 1yr
S. I = PRT/100 = 5400×8%×1/100 = 432
Amount = p+I = 5400+ 432 = 5832

C. I = 5832-5000= ₹832