Find the amount and the compound interest on ₹ 5000.

Find the amount and the compound interest on ₹ 5000 for 2 years at 6% per annum, interest payable yearly.

Solution:

It is given that
Principal (P) = ₹ 5000
Rate of interest (r) = 6% p.a.
Period (n) = 2 years
We know that
Amount = P (1 + r/100)n
Substituting the values
= 5000 (1 + 6/100)2
By further calculation
= 5000 × 53/50 × 53/50
= ₹ 5618
Here
CI = A – P
Substituting the values
= 5618 – 5000
= ₹ 618

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