Question

Find the compound interest and the total amount after 4 years and 6 months if the interest is compoundedannually.Principal = 1,00,000Rate of interest = 10% per annumTotal amount =Compound interest

Answer 1

Given:

Principal = P = 100,000

Rate of interet = r = 10% = 0.1

Compounded annually, n = 1

Time = t = 4 years and 6 months = 4.5 years

So,

The total amount = A

`A=P\cdot(1+(r)/(n))^(nt)`

Substitute with the given data:

`A=100,000\cdot(1+(0.1)/(1))^(4.5)=100,000\cdot1.1^(4.5)=153,556.1`

And the compound interest =

`153,556.1-100,1000=53,556.1`

So, the answer will be:

Total amount = 153,556.1

Compound interest = 53,556.1