Question

What will be the compound interest on an amount of Rs 5,000 for a period of 2 year at 8% p.a?

Answer 1

principle=5000

so compound interest for 1st year =5000*8*1/100=400

so new principle=5000+400=5400

C.I. for 2nd year=5400*10*1/100=540

so principle=5400+540=5940

C.I. for 3rd year=5490*12*1/100=712.8

so total compound interest in 3 years = 400+540+712.8=1652.8