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Find the Compound Interest When Principal = Rs 3000, Rate = 5% per Annum and Time = 2 Years.

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Question

Find the compound interest when principal = Rs 3000, rate = 5% per annum and time = 2 years.

Sum
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Solution

Principal for the first year = Rs 3, 000
Interest for the first year\[ = Rs\left( \frac{3, 000 \times 5 \times 1}{100} \right)\]
 = Rs 150
Amount at the end of the first year = Rs 3, 000 + Rs 150 
 = Rs 3, 150
Principal for the second year = Rs 3, 150
Interest for the second year \[= Rs\left( \frac{3, 150 \times 5 \times 1}{100} \right)\]
 = Rs 157 . 50
Amount at the end of the second year = Rs 3, 150 + Rs 157 . 50 
 = Rs 3307 . 50
∴ Compound interest \[ = Rs\left( 3, 307 . 50 - 3, 000 \right)\]
 = Rs 307 . 50

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