#### Question

Maria invested Rs 8,000 in a business. She would be paid interest at 5% per annum compounded annually. Find.

1) The amount credited against her name at the end of the second year

2) The interest for the 3^{rd} year.

#### Solution

1) P = Rs 8,000

R = 5% per annum

*n* = 2 years

A = Rs `[8000(1 + 5/100)^2] = Rs (8000(1 + 1/20)^2)`

= Rs `(8000 xx 21/20 xx 21/20)` = Rs 8820

2) The interest for the next one year, i.e. the third year, has to be calculated.

By taking Rs 8,820 as principal, the S.I. for the next year will be calculated.

S.I = Rs `((8820 xx 5 xx 1)/100)= Rs 441`

Is there an error in this question or solution?

Solution Maria Invested Rs 8,000 in a Business. She Would Be Paid Interest at 5% per Annum Compounded Annually. Find the Amount Credited Against Her Name at the End of the Second Year Concept: Rate Compounded Annually Or Half Yearly (Semi Annually).