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Find the compound interest generated by a sum of Rs. 36000 at the rate of 16.67% interest compounded annually in 1 year 73 days.
- ARs. 7500
- BRs. 8400
- CRs. 7000
- DRs. 7400
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Discussion 1
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CCommunity
P = Rs. 36000, r = 16.67% = 1/6 and t = 1 year 73 days
Interest generated in 1 year = 36000(1 + 1/6) – 36000 = Rs. 6000
Interest generated in 2nd year = Interest on (Sum + interest of 1st year)
⇒ Interest on Rs. 42000
⇒ 42000(1 + 1/6) – 42000 = Rs. 7000
But in 2nd year, we need to calculate the interest for 73 days:
∴ Interest for 73 days = 7000 × 73/365 = Rs. 1400
∴ Total interest = 6000 + 1400 = Rs. 7400
Interest generated in 1 year = 36000(1 + 1/6) – 36000 = Rs. 6000
Interest generated in 2nd year = Interest on (Sum + interest of 1st year)
⇒ Interest on Rs. 42000
⇒ 42000(1 + 1/6) – 42000 = Rs. 7000
But in 2nd year, we need to calculate the interest for 73 days:
∴ Interest for 73 days = 7000 × 73/365 = Rs. 1400
∴ Total interest = 6000 + 1400 = Rs. 7400