Mathematics
Calculate the amount and the compound interest on ₹ 25,000 for 2 years at 8% per annum, compounded annually.
Compound Interest
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Answer
For first year :
P = ₹ 25,000
T = 1 year
R = 8%
I =
= ₹ 2,000.
Amount = P + I = ₹ 25,000 + ₹ 2,000 = ₹ 27,000.
For second year :
P = ₹ 27,000
T = 1 year
R = 8%
I =
= ₹ 2160.
Amount = P + I = ₹ 27,000 + ₹ 2,160 = ₹ 29,160.
Compound interest = Final amount - Initial principal
= ₹ 29,160 - ₹ 25,000 = ₹ 4,160.
Hence, compound interest = ₹ 4,160 and amount = ₹ 29,160.
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