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Question
Rs.16,000 is invested at 5% compound interest compounded per annum. Use the table, given below, to find the amount in 4 years.
| Year ↓ |
Initial amount (Rs.) |
Interest (Rs.) |
Final amount (Rs.) |
| 1st | 16,000 | 800 | 16,800 |
| 2nd | ........... | ........... | ........... |
| 3rd | ........... | ........... | ........... |
| 4th | ........... | ........... | ........... |
| 5th | ........... | ........... | ........... |
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Solution
| Year ↓ |
Initial amount (Rs.) |
Interest (Rs.) |
Final amount (Rs.) |
| 1st | 16,000 | 800 | 16,800 |
| 2nd | 16,800 | 840 | 17,640 |
| 3rd | 17,640 | 882 | 18,522 |
| 4th | 18,522 | 926.10 | 19,448.10 |
| 5th | 19,448.10 | 972.405 | 20,420.505 |
1. P = ₹ 16,000, R = 5%
For 1st year
I = `(PxxRxxT)/100`
= `(16000xx5xx1)/100`
= ₹ 800
A1 = P + I
= 16000 + 800
= 16800
2. For 2nd year
P = ₹ 16,800, R = 5%, T = 1
I2 = `(16800xx5xx1)/100`
I2 = ₹ 840
A2 = P2 + I2
= 16800 + 840
= 17640
3. For 3rd year
P = 17640, R = 5%
I3 = `(17640xx5xx1)/100`
= 882
A3 = P3 + I3
= 17640 + 882
= 18522
4. For 4th year
P = 18522, R = 5%
I4 = `(18522xx5xx1)/100`
= 9261
A4 = 18522 + 926.1
= 19448.10
5. For 5th year
P5 = 19448.10, R = 5%
I5 = `(19448.10xx5xx1)/100`
= `97240.5/100`
= 972.40
A5 = 19448.10 + 972.40
= 20420.50
Thus, the amount in 4 years is Rs. 19448.10.
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