Question
Diya borrowed a sum of ₹25,000 from Abha for two years. If the rate of interest is 8% compounded annually, find the amount that Diya has to pay back.
The correct answer is
₹29,160
The formula for compound interest is A = P(1 + r/n)^(nt), where P = ₹25,000, r = 0.08, t = 2 years, and n = 1 (since it's compounded annually). - A = 25000(1 + 0.08/1)^(1×2) = 25000(1.08)^2 = 25000 × 1.1664 = ₹29,160. Thus, the amount Diya has to pay back is ₹29,160.
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Important Questions from Compound Interest
- A sum of money triples itself at a certain rate of compound interest in 11 years. In how many years will it amount to 27 times of itself?
A sum of ₹10,000 amounts to ₹12,321 in 2 years at a certain rate of interest per annum, compounded annually. The rate of interest per annum is:
- If the interest earned during the 2nd year on a certain sum is ₹2,352, and the rate of interest is 5% per annum compounded annually, then the sum is:
- A sum of money triples itself at a certain rate of compound interest in 17 years. In how many years will it amount to 81 times of itself?
If the interest earned during the $2^{nd}$ year on a certain sum is ₹3,342, and the rate of interest is 20% per annum compounded annually, then the sum is:
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