Question

Find the compound interest, correct to the nearest rupee, on Rs. 2,400 for `2 1/2` years at 5 per cent per annum.

Answer 1

For 1^st years

P = Rs. 2400

R = 5%

T = 1 year

I = `[ 2400 xx 5 xx 1]/100` = 120

A = 2400 + 120 = Rs. 2520

For 2^nd year

P = Rs. 2520

R = 5%

T = 1 year

I = `[ 2520 xx 5 xx 1]/100` = Rs. 126.

A = 2520 + 126 = Rs. 2646

For final `1/2` year,

P = Rs. 2646

R = 5%

T = `1/2` year

I = `[2646 xx 5 xx 1]/[100 xx 2]` = Rs. 66.15

Amount after `2 1/2` years = 2646 + 66.15

= Rs. 2712.15

Compound interest = 2712.15 - 2400 

= Rs. 312.15

= Rs. 312