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Nikita Invests Rs. 6000 for Two Years at a Certain Rate of Interest Compounded Annually. at the End of First Year It Amounts to Rs. 6720. Calculate: 1) The Rate of Interest. 2) The Amount at the End of the Second Year. - Mathematics

Nikita invests Rs. 6000 for two years at a certain rate of interest compounded annually. At the end of the first year, it amounts to Rs. 6720. Calculate:

1) the rate of interest.

2) the amount at the end of the second year.

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Solution

1) P = Rs. 6000, Amount at the end of the first year = Rs. 6720

S.I. for first year = Rs. (6720 – 6000) = Rs. 720

Let r% be the rate of interest p.a.

`720 = (6000 xx r xx 1)/100`

`r = 720/60 = 12%`

2) S.I. for second = `(6720 xx 12 xx 1)/100 = Rs  806.40`

Amount at the end of second year = Rs. (6720 + 806.40) = Rs. 7526.40

Concept: Concept of Compound Interest - Use of Compound Interest in Computing Amount Over a Period of 2 Or 3-years
  Is there an error in this question or solution?
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