Find the amount and the compound interest on Rs. 2500 for 2 years at 1

1.	Find the amount and the compound interest on Rs. 2500 for 2 years at 10% per annum, compounded annually.
Answer» Present value = Rs.2500 Interest rate = 10% per annum Time = 2 years Amount (A) = P (1 + R/100)ⁿ [Where, P = Present value R = Annual interest rate n = Time in years] ∴ A = 2500 (1 + 10/100)² ⇒ A = 2500 (11/10)² ⇒ A = 2500 × 121/100 ⇒ A = 25 × 121 ⇒ A = 3025 ∴ Amount = Rs.3025 ∴ Compound interest = Rs.(3025 – 2500) = Rs.525

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

Answer»

Present value = Rs.2500

Interest rate = 10% per annum

Time = 2 years

Amount (A) = P (1 + R/100)ⁿ

[Where, P = Present value

R = Annual interest rate

n = Time in years]

∴ A = 2500 (1 + 10/100)²

⇒ A = 2500 (11/10)²

⇒ A = 2500 × 121/100

⇒ A = 25 × 121

⇒ A = 3025

∴ Amount = Rs.3025

∴ Compound interest = Rs.(3025 – 2500)

= Rs.525