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  4. Find the compound interest on ₹ 40,000 at 12 % per annum for a period of 2 years. (in ₹)

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Q. Find the compound interest on $₹ 40,000$ at $12 \%$ per annum for a period of 2 years. (in ₹)

Simple Interest and Compound Interest

Solution:

$ P =₹ 40,000, R=12 \%, n=2 . $
$ CI =P[(1+\frac{R}{100})^n-1] $
$ =P[(1+\frac{12}{100})^2-1] $
$ =40,000[(\frac{28}{25})^2-1] $
$ =40,000[\frac{28^2-25^2}{(25)^2}] $
$ =40,000 \frac{(28+25)(28-25)}{25 \times 25}$
$ =64 \times 53 \times 3=₹ 10,176 .$