Question

How much will ₹ 20,000 amount to in 2 years at CI if the rates for successive years are 8% and 10% p.a. respectively?

Answer 1

The principal amount, P, is given as 20,000.

The rate of interest for the first year, R₁, is 8%.

The rate of interest for the second year, R₂, is 10%.

The formula for the amount, A, after 2 years with successive rates of interest is given by `A = P(1 + R_1/100)(1 + R_2/100)`.

Substituting the given values into the formula, the amount is calculated as `A = 20000 (1 + 8/100)(1 + 10/100)`.

This simplifies to `A = 20000 (108/100)(110/100)`.

Further simplification yields A = 20000 × 1.08 × 1.10.

The calculation results in A = 23760.

The amount will be ₹ 23,760.