Compound interest

Compound Interest

 (i)                  Find the amount and the 

             compound interest on 8000 

              at 5% p.a for 2 years.

Principal = Rs 8000/-

Rate of Interest = 5% p.a

Interest for the first year 

= 8000 x 5% x 1/100 = Rs 400

                                  

                 Amount for the first year or 

                  principal for the second year

                              = (8000 + 400) Rs = 8400 Rs

   

Interest for the second year 

= 8400 x 5% x 1/100 = Rs 420

                               Amount for the second year

                              =  (8400 + 420) Rs = 8820 Rs

                              Total Compound Interest

                              = 8820 – 8000 Rs = Rs 820