Mathematics
Calculate the amount and the compound interest on ₹5000 in 2 years when the rate of interest for successive years is 6% and 8% respectively.
Compound Interest
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Answer
Principal for first year = ₹5000.
Interest for the first year = ₹ = ₹300.
Amount after one year = ₹5000 + ₹300 = ₹5300.
Principal for the second year = ₹5300.
Interest for the second year = ₹ = ₹424.
Amount after 2 years = ₹5300 + ₹424 = ₹5724.
Compound interest = Final amount - Principal = ₹5724 - ₹5000 = ₹724.
Hence, the amount and the compound interest are ₹5724 and ₹724 respectively.
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