Mathematics
A sum of ₹ 13500 is invested at 16% per annum compound interest for 5 years. Calculate :
(i) the interest for the first year.
(ii) the amount at the end of the first year.
(iii) the interest for the second year, correct to the nearest rupee.
Compound Interest
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Answer
(i) For first year :
P = ₹ 13500
R = 16%
T = 1 year
I = = ₹ 2160.
Hence, interest for first year = ₹ 2160.
(ii) By formula,
Amount = P + I = ₹ 13500 + ₹ 2160 = ₹ 15660.
Hence, amount at end of first year = ₹ 15660.
(iii) For second year :
P = ₹ 15660
R = 16%
T = 1 year
I = = ₹ 2505.6
Hence, interest for second year = ₹ 2506.
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