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Mathematics

Calculate the compound interest for the second year on ₹ 15,000 invested for 5 years at 6% per annum.

Simple Interest

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Answer

For 1st year:

P = ₹ 15,000

R = 6%

T = 1 year

Interest=(P×R×T100)=(15,000×6×1100)=90,000100=900\text{Interest} = \Big(\dfrac{P \times R \times T}{100}\Big)\\[1em] = ₹ \Big(\dfrac{15,000 \times 6 \times 1}{100}\Big)\\[1em] = ₹ \dfrac{90,000}{100}\\[1em] = ₹ 900

And

Amount = P + Interest=15,000+900=15,900\text{Amount = P + Interest}\\[1em] = ₹ 15,000 + 900\\[1em] = ₹ 15,900

For 2nd year:

P = ₹ 15,900

R = 6%

T = 1 year

Interest=(P×R×T100)=(15,900×6×1100)=954,000100=954\text{Interest} = \Big(\dfrac{P \times R \times T}{100}\Big)\\[1em] = ₹ \Big(\dfrac{15,900 \times 6 \times 1}{100}\Big)\\[1em] = ₹ \dfrac{954,000}{100}\\[1em] = ₹ 954

Hence, compound interest = ₹ 954.

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