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Find the compound interest of N5000 for 2 years at 5% per annum


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5 votes

SOLUTION

For finding the compound Interest first we need to get the amount and then subtract the value of principal from amount

Calculation Begins

Principal = 5000, Rate of Interest = 5%, Time = 2 yrs


\looparrowright \sf{A = P(1 + (r)/(100) )^(n) } \\ \\ \looparrowright \frak{ {\sf A} = 5000(1 + (5)/(100) )^(2) } \\ \\ \looparrowright \frak{ {\sf A} = 5000(1 + (1)/(20) )^(2) } \\ \\ \looparrowright \frak{ {\sf A} = 5000( (21)/(20))^(2) } \\ \\ \looparrowright \frak{ {\sf A} =5000 * (441)/(400)} \\ \\ \looparrowright \frak{ {\sf A} = 12.5 * 441} \\ \\\looparrowright \frak{ {\sf A} = 5152.5}

Hence the amount is 5152.5

Compound Interest = Amount - Principal

= 5152.5 - 5000 = 152.5

  • 152.5 is the Compound Interest
User John Rumpel
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