Compound Interest Calculation Explained
This solution details the calculation of compound interest (CI) for a given principal amount, interest rate, and time period.
Problem Setup
- Principal (P): ₹6,000
- Annual Interest Rate (R): 10%
- Time Period (T): 2 years
Formula for Compound Interest
The formula used to calculate the total amount (A) after compound interest is:
A = P \left(1 + \frac{R}{100}\right)^T
The Compound Interest (CI) is then calculated as:
CI = A - P
Step-by-Step Calculation
-
Calculate the total amount (A) after 2 years:
A = 6000 \times \left(1 + \frac{10}{100}\right)^2
A = 6000 \times \left(1 + 0.1\right)^2
A = 6000 \times (1.1)^2
A = 6000 \times 1.21
A = ₹7,260
-
Calculate the Compound Interest (CI):
CI = A - P
CI = ₹7,260 - ₹6,000
CI = ₹1,260
Conclusion
The compound interest calculated for a principal of ₹6,000 at an annual interest rate of 10% for 2 years is ₹1,260.
Similar Questions
- A sum of ₹20,000 is borrowed by Heena for 2 years at an interest of 8% compounded annually. Find the compound interest.
- A sum is invested at compound interest payable annually. The interest in two successive years was ₹225 and ₹236.25. Find the rate of interest.
- A sum was invested for 3 years on compound interest at 6%, 12% and 18% in first, second and third year respectively. The sum amounts to ₹20,000 in 3 years. Find the principal amount.
- An amount doubles itself at compound interest in five years. In how many years will it amount to sixteen times itself?
- How much amount of money (in ₹) at compound interest will amount to ₹5,000 in 3 years if the rate of interest is 2% for the $1^\text{st}$ year, 3% for the $2^\text{nd}$ year and 4% for the $3^\text{rd}$ year?
Find the total amount (in ₹) on ₹4500 at 12% per annum for 2 years and 8 months compounded annually.
- A sum of money, when invested at 10% compound interest per annum, amounts to ₹1,815 after 2 years. What is the original sum that was invested in the beginning?
A sum of money becomes $₹6,400$ in $2\text{ years}$ and $₹8,100$ in $4\text{ years}$ on compound interest. Find the rate of compound interest.
- Find the compound interest on ₹7,500 at 4% per annum for 2 years.
- The compound interest on ₹20,000 at 8% per annum is ₹3,328. The period in years is:
Important Questions from Compound Interest
A person borrowed Rs. 10000 on compound interest at the rate of 40 percent per annum. If the interest is compounded half yearly, then what will be the amount to be paid after 1.5 years?
In how many years will a sum of Rs.1875 amount to Rs.2187 at 8 percent p.a. compound interest?
A sum of money has increased by 45% in 9 years at simple interest. What will be the compound interest of Rs. 12,000 after 3 years at the same rate?
At a certain rate of compound interest a certain sum amounts to Rs. 64800 in 4 years and Rs. 93312 in 6 years. What is the compound interest earned in fifth year?
Karuna has an option to invest in the following three schemes. If she wants to invest Rs P, then which scheme will be most beneficial for her?
Scheme that comes with lower interest rates and terms;
I. 28% p.a. interest, compounded every quarter, for one year.
II. 28% p.a. interest, compounded every half year, for one year.
III. 28% p.a. interest, for one year, compounded every year.
