Question

Find the amount of ₹ 8000 for 2 years compounded annually and the rates being 9% per annum during the first year and 10% per annum during the second year.

Answer 1

Given:

Present value= ₹ 8000

Interest rate for first year, p= 9 % per annum

Interest rate for second year, q= 10 % per annum

Amount (A) = P × (1+p/100) × (1+q/100)

Now substituting the values in above formula we get,

∴ A = 8000 × (1+9/100) × (1+10/100)

⇒ A = 8000 × (109/100) × (11/10)

⇒ A = 8 × 109 × 11

⇒ A = ₹ 9592