Question

How much will Rs 25000 amount to in 2 years at compound interest, if the rates for 1^st and 2^nd years be 4% and 5% p.a. respectively?

Answer 1

Here P = Rs.25000, t = 2 years, r = 4%, 5% successively.
Now, Amount
= `"P"(1 + "r"_1/100)(1 + "r"_2/100)`

= `25000(1 + 4/100)(1 + 5/100)`

= `25000(104/100)(105/100)`
= 27300
Hence, Amount = Rs.27300.