Find the amount and the compound interest on ₹ 2000 in 2 years.

Find the amount and the compound interest on ₹ 2000 in 2 years if the rate is 4% for the first year and 3% for the second year.

Solution:

It is given that
Principal (P) = ₹ 2000
Rate of interest = 4% on the first year and 3% for the second year
Period (n) = 2 years
We know that
Amount = P (1 + r/100)n
Substituting the values
= 2000 (1 + 4/100) (1 + 3/100)
By further calculation
= 2000 × 26/25 × 103/100
= ₹ 2142.40
Here
CI = A – P
Substituting the values
= 2142.40 – 2000
= ₹ 142.40

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