Question
Calculate the amount and compound interest on (i) Rs 15000 for 2 years at 10% per annum compounded annually.
Solution
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Given Principal (P) = Rs 15000
Rate (R) = 10% p.a.
Period (n) = 2 years
Hence,
Amount (A) = P {1 + (R / 100)}$$^n$$
= Rs 15000 {1 + (10 / 100)}$$^2$$
On further calculation, we get,
= Rs 15000 × (11 / 10) × (11 / 10)
We get,
= Rs 18150
Therefore,
Compound interest = Amount – Principal
= Rs 18150 – 15000
We get,
= Rs 3150
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