Question

Find the amount and compound interest on ₹ 20000 for 2 years if the rate of interest for successive years are 8% and 9%.

Answer 1

Given:

• Principal, (P = ₹ 20,000)
• Time = 2 years
• Rate for first year, (r₁ = 8%)
• Rate for second year, (r₂ = 9%)

Step-wise calculation:

1. Calculate amount after first year using rate 8%:

`A_1 = P xx (1 + r_1/100)`

`A_1 = 20000 xx (1 + 8/100)`

A₁ = 20000 × 1.08

A₁ = ₹ 21600

2. Calculate the amount after second year using the amount after first year and rate 9%:

`A = A_1 xx (1 + r_2/100)`

`A = 21600 xx (1 + 9/100)`

A = 21600 × 1.09

A = ₹ 23544

3. Calculate compound interest:

C.I. = A – P

C.I. = 23544 – 20000

C.I. = ₹ 3544