Question

Find the amount and the compound interest on ₹ 2500 for 2 years at 10% per annum, compounded annually.

Answer 1

Present value= ₹ 2500

Interest rate= 10% per annum

Time=2 years

To find the amount we have the formula,

Amount (A) = P (1+(R/100))ⁿ

Where P is present value, r is rate of interest, n is time in years.

Now substituting the values in above formula we get,

∴ A = 2500 (1 + 10/100)²

⇒ A = 2500 (11/10)²

⇒ A = 2500 (121/100)

⇒ A = 25 (121)

⇒ A = ₹ 3025

∴ Compound interest = A – P

= 3025 – 2500= ₹ 525