Principal Calculation Using 2nd Year Compound Interest
The interest earned during the second year is calculated on the amount at the end of the first year. This amount includes the original principal sum plus the interest earned in the first year.
Compound Interest Calculation Steps
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Identify Given Information:
- Interest for the 2nd year (\(I_2\)) = ₹8063
- Rate of interest (\(R\)) = 10% per annum = 0.1
- Principal sum (\(P\)) = ?
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Formula for 2nd Year Interest:
The amount at the end of the first year (\(A_1\)) is \(P(1+R)\). The interest for the second year (\(I_2\)) is calculated as \(A_1 \times R\). Therefore, \(I_2 = P(1+R) \times R\).
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Substitute Known Values:
Using the formula \(I_2 = P(1+R) \times R\), we substitute the given values:
\(8063 = P(1 + 0.1) \times 0.1\)
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Solve for Principal (\(P\)):
Simplify the equation:
\(8063 = P(1.1) \times 0.1\)
\(8063 = P \times 0.11\)
Now, isolate \(P\):
\(P = \frac{8063}{0.11}\)
\(P = 73300\)
The principal sum is ₹73300.
Similar Questions
- In what time will ₹ 4400 become ₹ 4576 at 8% per annum interest compounded half – yearly?
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?
