Find the amount and the compound interest on Rs 2000 at 10 per annum for 2years compounded annually

Answer

Verified

Hint: To solve this type of problem, first calculate the final amount needed to pay after two year then subtract this final amount to the given principal amount to calculate the compound interest in two years.

Complete Step-by-step solution
Given principal amount is P =Rs 2000
Time to repay the amount is N = 2 years
Rate of interest is R =5 % per annum
To find the amount of compound interest after 2 years
C.I. = ?
To calculate the compound interest first we will calculate the final amount that we need to pay after 2 year
We know that the formula to calculate the final amount
$$A = P{\left( {1 + \dfrac{R}{{100}}} \right)^N}$$
On putting the given values
$$A = 2000 \times {\left( {1 + \dfrac{{5}}{{100}}} \right)^2}$$
On simplification
$$A = 20000 \times \dfrac{{441}}{{400}}$$
$$A = 2205$$
Now we will calculate the compound interest
We know that
∴ $$C.I. = A - P$$
On putting the values of A and P
We get
$$ = Rs.2205 - Rs.2000$$
On subtracting
We get $$ = Rs.205$$

Hence the compound interest that needs to be paid after two year will be equal to Rs 205.

Note: The interest rate for the first year in compound interest is the same as that in case of simple interest, Other than the first year, the interest compounded annually is always greater than that in case of simple interest.
>When calculating compound interest, the number of compounding periods makes a significant difference. The basic rule is that the higher the number of compounding periods, the greater the amount of compound interest.

Home

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

Question

Open in App

Solution

Principal (P)=Rs. 2500Rate (r)= 10% Per annumTime (t)=2 yearsAmount, A is given by the formulaA=P(1+r100)t=2500(1+10100)2=2500×1110×1110=25×11×11=Rs.3025Compound Interest = Amount − Principal=3025−2500=Rs.525

Suggest Corrections

48

Same exercise questions

Q.

Find the difference between the simple interest and the compound interest on Rs.5000 for 2 years at 9% per annum.

Q.

Ratna obtained a loan of Rs 25000 from the Syndicate Bank to renovate her house. If the rate of interest is 8% per annum, what amount will she have to pay to the bank after 2 years to discharge her debt ?

Q.

Manoj deposited a sum of Rs 64000 in a post office for 3 years, compounded annually at 712% per annum. What amount will he get on maturity ?

Q.

Find the amount and the compound interest on Rs 15625 for 3 years at 12% per annum, compounded annually.

Q.

Michael borrowed Rs.16000 from a finance company at 10% per annum. compounded half-yearly. What amount of money will discharge his debt after 112years?

View More

What is the compound interest on rupees 2000 for 2 years at 10% rate per annum?

What is the compound interest on Rs 20000 for 2 years at the rate of 10 per annum compounded annually?

What is the compound interest accrued in a sum of Rs 2000 at the rate of 4% per annum in 2 years?

What will be the compound interest on 2000 for 2 years?