Q. 73.9( 26 Votes )

Find the amount of Rs. 8000 for 2 years compounded annually and the rates being 9% per annum during the first year and 10% per annum during the second year.

Answer :

Present value = Rs.8000


Interest rate for 1st year, p = 9 % per annum


Interest rate for 2nd year, q = 10 % per annum


Time = 2 years


Amount (A) = P × (1 + p/100) × (1 + q/100)


A = 8000 × (1 + 9/100) × (1 + 10/100)


= 8000 × (109/100) × (1 + 1/10)


= 8000 × 109/100 × 11/10


= 8 × 109 × 11


= 9592


Amount = Rs.9592

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