Question

Find the amount and the compound interest payable annually on the following :

Rs.32000 for 2 years at 7`(1)/(2)`% per annum.

Answer 1

Rs.32000 for 2 years at 7`(1)/(2)`% per annum.
Here P₁ = Rs.32000 and r = 7`(1)/(2)`% = `(15)/(2)`%
So, Amount after 1 year
= `"P"(1 + "r"/100)`

= `32000(1 + 15/(2 xx 100))`

= `32000(1 + 3/40)`

= `32000(43/40)`
= 34400
Thus, P₂ = Rs.34400 and r = `(15)/(2)`%
So, Amount after 2 year
= `"P"(1 + "r"/100)`

= `34400(1 + 15/(2 xx 100))`

= `34400(1 + 3/40)`

= `34400(43/40)`
= 36980
Hence, Amount = Rs.36980
Also, CI
= A - P
= Rs.36980 - Rs.32000
= Rs.4980.