Question 63

What is the compound interest on a sum of ₹10,000 at 14% p.a. for $$2\frac{5}{7}$$ years where the interest is compounded yearly? (nearest to ₹1)

Solution

Given that,

Principle amount (P)=10,000Rs.

Rate of interest $$=14\%$$

Time $$=2\frac{5}{7}=2+\dfrac{5}{7}$$

We know that $$A=P(1+\dfrac{R}{100})^n$$

$$\Rightarrow A=10,000(1+\dfrac{14}{100})^2(1+\dfrac{5\times14}{100\times 7})$$

$$\Rightarrow A=10,000(1.14)^2(1+0.1)$$

$$\Rightarrow A=10,000(1.14)^2(1.1)=14295.6$$Rs.

Hence the required profit $$14295.6-10000=4295.6\cong4296$$Rs.

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