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
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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
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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 money doubles itself at a compound interest in 15 years. In how many years will it become 8 times the original amount?
- A man placed a fixed deposit of ₹16,000 for a period of 2 years at 10% compound interest. If the interest is compounded half-yearly, then how much amount (in ₹) will he receive after the full term?
- A sum of ₹15,625 amounts to ₹24,389 in 3 years at a certain rate of interest per annum, compounded annually. The rate of interest per annum is:
- 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 of ₹20,000 is borrowed by Heena for 2 years at an interest of 8% compounded annually. Find the compound interest.
- The compound interest on ₹20,000 at 8% per annum is ₹3,328. The period in years is:
- 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.
- In what time will ₹ $1,000$ become ₹ $1,331$ at an interest rate of $10\%$ per annum compounded annually?
- The population of a town increases at the rate of 10% every year. The present population is 1,000. In how many years will the population become 1,331?
- If an investment of ₹1,000 amounts to ₹1,440 in 2 years when compounded annually, then what is the rate of compound interest?
Important Questions from Compound Interest
At what rate percent per annum will Rs. 7200 amount to Rs. 7938 in one year, if interest is compounded half yearly?
What is the compound interest (in Rs.) on a sum of Rs. 8192 for \(1 \frac{1}{4}\) years at 15% per annum, if interest is compounded 5-monthly ?
What is the difference (in Rs.) between the interests on Rs. 50,000 for one year at 8% per annum compounded half yearly and yearly?
A sum of money becomes Rs. 11,880 after 4 years and Rs. 17,820 after 6 years on compound interest, if the interest is compounded annually. What is the half of the sum (in Rs.)?
A sum invested at compound interest amounts to Rs. 7,800 in 3 years and Rs. 11,232 in 5 years. What is the rate per cent?
