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Question
A sum of Rs. 8,000 is invested for 2 years at 10% per annum compound interest. Calculate:
(i) interest for the first year.
(ii) principal for the second year.
(iii) interest for the second year.
(iv) the final amount at the end of the second year
(v) compound interest earned in 2 years.
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Solution
(i) Here Principal (P) = Rs. 8,000
Rate of interest = 10%
Interest for the first year =`(8,000xx10xx1)/100`
= Rs.800
(ii) ∴ Amount = Rs.8,000 + Rs.800 = Rs.8,800
Thus Principal for the second year = Rs.8,800
(iii) Interest for the second year
`=(8,800xx10xx1)/100`
= Rs.880
(iv) Amount at the end of second year = Rs.8,800 + Rs.880 = Rs.9,680
(v) Hence compound interest earned in 2 years
= Rs.9,680 − Rs.8,000 = Rs.1680
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