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Mathematics

Find the amount and the compound interest on ₹8000 at 5% per annum for 2 years.

Compound Interest

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Answer

Principal for first year = ₹8000.

Interest for the first year = ₹ 8000×5×1100\dfrac{8000 \times 5 \times 1}{100} = ₹400.

Amount after one year = ₹8000 + ₹400 = ₹8400.

Principal for the second year = ₹8400.

Interest for the second year = ₹ 8400×5×1100\dfrac{8400 \times 5 \times 1}{100} = ₹420.

Amount after 2 years = ₹8400 + ₹420 = ₹8820.

Compound interest for 2 years = Final amount - Principal = ₹8820 - ₹8000 = ₹820.

Hence, the amount and compound interest on ₹8000 at 5% per annum after 2 years is ₹8820 and ₹820 respectively.

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