What will be the amount and compound interest if ₹ 5000 is invested at 8% per annum 2years?

Question 11 Compound Interest Exercise 2.1

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Answer:

It is given that

Principal = ₹ 5000

Period = 2 years

Rate of interest for the first year = 6%

Rate of interest for the second year = 8%

We know that

Amount for two years = \mathrm{P}(1+\mathrm{r} / 100)^{\mathrm{n}}

Substituting the values

= 5000 (1 + 6/100) (1 + 8/100)

By further calculation

= 5000 × 53/50 × 27/25

= ₹ 5724

Here

Interest = A – P

Substituting the values

= 5724 – 5000

= ₹ 724

Video transcript

"hi guys welcome to lido q a video i am vini your leader tutor bringing you this question on your screen so the question is calculate the amount and the compound interest on rupees 5000 in two years when the interest of rate of interest for successive years is six percent and eight percent respectively so what is given to us it is given that principle is rupees two thousand five thousand time is equal to two years rate of interest for the first year is six percent and the rate of interest for the second year is eight percent right now solution the amount for the first year will be amount for the first year will be p into 1 plus r1 by 100 since it is only for 1 year to the power 1. now this amount for the first year becomes the principle for the second year so this into 1 plus r2 by 100 again gives us the amount for after the second year therefore amount substituting the values we get is equal to 5000 into 1 plus 6 by 100 into 1 plus 8 by 100 so this will be equal to 5000 into 106 by 100 into 108 by 100 right so let us cancel the zeros this zero cancels out five ones are five five twos are ten two into fifty four so this is hundred and six into fifty four so this will be equal to rupees five seven two four and interest amount so the interest is equal to rupees amount minus principal that is equal to rupees 724 isn't that easy guys right but if you still have a doubt please leave a comment below do like the video and subscribe to our channel i'll see you in our next video until then bye guys keep practicing"

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Grandpa Jack wants to help his grandson, Little Jack, with college expenses. Little Jack is currently 3 years old. If Grandpa Jack invests $5,000 in a college savings account earning 5% compounded yearly, how much money will he have in 15 years when Little Jack is 18? 

Possible Answers:

Correct answer:

Between $10,000-$10,500

Explanation:

To solve this, we can create an equation for the value based on time. So if we let t be the nmbers of years that have passed, we can create a function f(t) for the value in the savings account. 

We note that f(0) =5000. (We invest 5000 at time 0.) Next year, he will have 5% more than that. To find our total value at the end of the year, we multiply 5,000 * 1.05 = 5,250. f(1) = 5000(1.05)=5,250. At the end of year 2, we will have a 5% growth rate. In other words, f(2) = (1.05)* f(1). We can rewrite this as 

Cherry invested 

Possible Answers:

Correct answer:

Explanation:

The monthly rate is 

3 years = 36 months

According to the compound interest formula

and here

Scott wants to invest $1000 for 1 year. At Bank A, his investment will collect 3% interest compounded daily while at Bank B, his investment will collect 3.50% interest compounded monthly. Which bank offers a better return? How much more will he receive by choosing that bank over the other?

Possible Answers:

Correct answer:

Explanation:

Calculate the total amount from each bank using the following formula:

Bank A:

Bank B:

Bryan invests $8,000 in both a savings account that pays 3% simple interest annually and a certificate of deposit that pays 8% simple interest anually. After the first year, Bryan has earned a total of $365.00 from these investments. How much did Bryan invest in the certificate of deposit?

Possible Answers:

Correct answer:

Explanation:

Let 

Barry invests $9000 in corporate bonds at 8% annual interest, compounded quarterly. At the end of the year, how much interest has his investment earned?

Possible Answers:

Correct answer:

Explanation:

Use the compound interest formula

substituting 

Subtract 9,000 from this figure - the interest earned is $741.89

Tom deposits his $10,000 inheritance in a savings account with a 4% annual interest rate, compounded quarterly. He leaves it there untouched for six months, after which he withdraws $5,000. He leaves the remainder untouched for another six months.

How much interest has Tom earned on the inheritance after one year?

Possible Answers:

Correct answer:

Explanation:

Since in each case the interest is compounded quarterly, the annual interest rate of 4% is divided by 4 to get 1%, the effective quarterly interest rate. 

The $10,000 remains in the savings account six months, or two quarters, so 1% is added twice - equivalently, the $10,000 is multiplied by 1.01 twice:

$5,000 is withdrawn from the savings account, leaving 

This money is untouched for six months, or two quarters, so again, we multiply by 1.01 twice:

Subtract $5,000 to get the interest:

On January 1, Gary borrows $10,000 to purchase an automobile at 12% annual interest, compounded quarterly beginning on April 1. He agrees to pay $800 per month on the last day of the month, beginning on January 31, over twelve months; his thirteenth payment, on the following January 31, will be the unpaid balance. How much will that thirteenth payment be?

Possible Answers:

Correct answer:

Explanation:

12% annual interest compounded quarterly is, effectively, 3% interest per quarter.

Over the course of one quarter, Gary pays off 

First quarter:

Second quarter:

Third quarter:

Fourth quarter:

The thriteenth payment, with which Gary will pay off the loan, will be $913.16.

Jessica deposits $5,000 in a savings account at 6% interest. The interest is compounded monthly. How much will she have in her savings account after 5 years?

Possible Answers:

None of the other answers are correct.

Correct answer:

Explanation:

where 

A real estate company is considering whether to accept a loan offer in order to develop property.  The principal amount of the loan is $400,000, and the annual interest rate is 7% compounded semi-anually. If the company accepts the loan, what will be the balance after 4 years?

Possible Answers:

Correct answer:

Explanation:

Recall the formula for compound interest:

Plug in the values given in the question:

Nick found a once-in-a-lifetime opportunity to buy a rare arcade game being sold at a garage sale for $5730. However, Nick can't afford that right now, and decides to take out a loan for $1000. Nick didn't really read the fine print on the loan, and later figures out that the loan has a 30% annualy compounded interest rate! (A very dangerous rate). How much does Nick owe on the loan 2 years from the time he takes out the loan? (Assume he's lazy and doesn't pay anything back over those 2 years.)

Possible Answers:

Correct answer:

Explanation:

For compound interest, the amount Nick owes is

where 

We have

Hence our answer is $1690.

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