1 Answer

Mvanella · Answer 1 · 2022-03-19T07:53:30+0000

Given:

Principal value = 40000

Rate of compounded interest = 20%

Time = 2 years

To find:

The interest.

Solution:

Formula for amount is

$A=P\left(1+(r)/(100)\right)^t$

Where, P is principal, r is rate of interest and t is time in years.

Putting the given values, we get

$A=40000\left(1+(20)/(100)\right)^2$

$A=40000\left(1+(1)/(5)\right)^2$

$A=40000\left((6)/(5)\right)^2$

$A=40000\left((36)/(25)\right)$

A=57600

Now, the formula for interest is

I=A-P

I=57600-40000

I=17600

Therefore, the amount of compound interest is 17,600.

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