By using the formula, find the amount and compound interest on:

Question:

By using the formula, find the amount and compound interest on:
Rs 6000 for 2 years at 9% per annum compounded annually.

Solution:

Principal amount, $\mathrm{P}=$ Rs 6000

Rate of interest, $\mathrm{R}=9 \%$ per annum

Time, $n=2$ years.

The formula for the amount including the compound interest is given below :

$A=$ Rs. $P\left(1+\frac{R}{100}\right)^{\mathrm{n}}$

$\Rightarrow A=$ Rs. $6000\left(1+\frac{9}{100}\right)^{2}$

$\Rightarrow A=$ Rs. $6000\left(\frac{100+9}{100}\right)^{2}$

$\Rightarrow A=$ Rs. $6000\left(\frac{109}{100}\right)^{2}$

$\Rightarrow A=$ Rs. $6000(1.09 \times 1.09)^{2}$

$\Rightarrow A=$ Rs. $7128.6$

i. e., the amount including the compound interest is Rs $7128.6$.

$\therefore$ Compound interest $=$ Rs $(7128.6-6000)=$ Rs $1128.6$

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