Question
What is the compound interest on a sum of ₹19,500
invested for 1(2/5) year at 10% pa., interest compounded annually?Solution
Interest rate for 2/5 years = 10 x (2/5) = 4% Now, A = 19500(1 + 10/100)1 x (1 + 10/100)2/5 A = 19500(1 + 10/100)1 × (1 + 4/100)2/5 A = 19500(1 + 1/10) × (1 + 1/25) A = 19500(11/10) × (26/25) A = 22308 So, interest of the given years = 22308 - 19500 Rs. 2808
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