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Question
Calculate the compound interest for the second year on Rs. 15000 invested for 5 years at 6% per annum.
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Solution
Principal (P) = Rs.15000
Rate (R) = 6% p.a.
Period (n) = 5 years
first year:
Interest for the first year =`("PRT")/100`
`=(15000xx6xx1)/100`
= Rs.900
∴ Amount for the first year = Rs.15000 + 900
= Rs.15900
Second year:
Principal (P) = Rs.15900
Rate (R) = 6% p.a.
Time take = 1 years
Simple Interest for the second year =`(15900xx6xx1)/100`
= 159 x 6
Simple Interest = Rs. 954
Compound interest = Rs. 954
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