Question

Find the compound interest on ₹ 7000 in 2 years at 12% compounded annually.

Answer 1

Given:

• Principal (P) = ₹ 7000
• Rate of interest (r) = 12% per annum
• Time (n) = 2 years
• Compounded annually

Step-wise calculation:

Step 1: Calculate the amount (A) using the compound interest formula:

`A = P(1 + r/100)^n`

Step 2: Substitute the values:

`A = 7000(1 + 12/100)^2`

`A = 7000 xx (112/100)^2`

`A = 7000 xx 112/100 xx 112/100`

Step 3: Calculate the amount:

A = 7000 × 1.12 × 1.12

A = 7000 × 1.2544

A = ₹ 8780.8

Step 4: Calculate the compound interest (C.I.):

C.I. = A – P

 C.I. = 8780.8 – 7000

C.I. = ₹ 1780.8