A sum of Rs. 20,000 is borrowed by Heena for 2 years at an interest of 8% compounded annually. Find the Compound Interest (C.I.) and the amount she has to pay at the end of 2 years. - Mathematics

Sum
A sum of Rs. 20,000 is borrowed by Heena for 2 years at an interest of 8% compounded annually. Find the Compound Interest (C.I.) and the amount she has to pay at the end of 2 years.

Solution

Let the principal for the first year be P1. Here, P1 = Rs. 20,000.

SI1 = SI at 8% p.a. for 1st year = ₹ (20000 xx 8)/100 = ₹ 1600

Amount at the end of 1st year = P1 + SI1
= Rs. 20000 + Rs. 1600
= Rs. 21600 = P2 (Principal for 2nd year)

SI2 = SI at 8% p.a. for 2nd year = ₹ (21600 xx 8)/100 = ₹ 1728

Amount at the end of 2nd year = P2 + SI2

= Rs. 21600 + Rs. 1728

= Rs. 23328

Total interest given = Rs. 1600 + Rs. 1728 = Rs. 3328.

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