Q7 of 48 Page 118

Find Compound interest paid when a sum of Rs. 10000 is invested for 1 year and 3 months at 8 % per annum compounded annually.

Principal (P) = Rs. 10000

Rate of interest (R) = 8.5%


Time period (T) = 1year 3 months


For T = 1 year,




I = Rs. 850


∴ Interest for 1 year is Rs. 850


Amount at the end of 1 year = Principal + interest


Amount = 10000+850


= 10850


∴ Amount at the end of 1 year is Rs. 10850


For T = 3 months =




I = Rs. 230.56


∴ Interest for year is Rs. 230.56


Amount at the end of year = Principal + interest


Amount = 10850+230.56


= 11080.56


∴ Amount at the end of year is Rs. 11080.56


Total interest for 1.3 year = Interest for 1 year + Interest for year


= 850+230.56


= 1080.56


∴ The compound interest paid is Rs. 1080.56


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