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2. What interest will you get on a principal of 800 in 2 years, when the rate of interest 10pa, compounded annually |
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Answer» 8000R = 10% per/annum: into decimT = 2 yearsPutting VALUE into the formula,Calculating compound interest for 1st YEAR:A = 8,000 (1 + 0.1/1)(1)(1)A = 8,000 (1 + 0.1)(1)A = 8000 (1 + 0.1)A = 8000 (1.1)A = 8800The AMOUNT at the end of the 1st year is 8800.Now, let's calculate the compound interest of 2nd year:A = 8,800 (1 + 0.1/1)(1)(1)A = 8,800 (1 + 0.1)(1)A = 8800 (1 + 0.1)A = 8800 (1.1)A = 9680The amount at the end of 2nd year is 9680.Therefore, compound interest = 9680 - 8000 = Rs.1680.Than |
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