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A person invests 500 at the end of each year with a bank which pays interest at 10% p. a C.I. annually. The amount standing to his credit three year after he has made his yearly?
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A person invests 500 at the end of each year with a bank which pays in...
Calculation of Compound Interest
Calculation of Investment Amount
Calculation of Interest Rate
Calculation of Total Amount
Conclusion
Compound Interest is calculated on the principal amount and also on the interest earned from the previous year. The formula for calculating compound interest is:
A = P (1 + r/n) ^ (nt)
- A is the amount at the end of the investment period.
- P is the principal amount invested.
- r is the annual interest rate.
- n is the number of times the interest is compounded per year.
- t is the number of years.
Calculation of Investment Amount
The person invests 500 at the end of each year. Therefore, the investment amount after three years will be:
Investment Amount = 500 * 3 = 1500
Calculation of Interest Rate
The bank pays interest at 10% p. a C.I. annually. Therefore, the interest rate per year will be:
Interest Rate = 10%
Calculation of Total Amount
Using the formula of compound interest, we can calculate the total amount standing to the person's credit after three years:
A = P (1 + r/n) ^ (nt)
Where,
- P = 1500 (Investment Amount)
- r = 10% (Interest Rate)
- n = 1 (Compounding Frequency)
- t = 3 (Number of Years)
Putting the values in the formula:
A = 1500 (1 + 0.10/1) ^ (1*3)
A = 1500 (1.10) ^ 3
A = 1500 * 1.331 = 1996.50
Conclusion
The total amount standing to the person's credit after three years of investment is 1996.50.
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A person invests 500 at the end of each year with a bank which pays interest at 10% p. a C.I. annually. The amount standing to his credit three year after he has made his yearly?
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A person invests 500 at the end of each year with a bank which pays interest at 10% p. a C.I. annually. The amount standing to his credit three year after he has made his yearly? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about A person invests 500 at the end of each year with a bank which pays interest at 10% p. a C.I. annually. The amount standing to his credit three year after he has made his yearly? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A person invests 500 at the end of each year with a bank which pays interest at 10% p. a C.I. annually. The amount standing to his credit three year after he has made his yearly?.
A person invests 500 at the end of each year with a bank which pays interest at 10% p. a C.I. annually. The amount standing to his credit three year after he has made his yearly? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about A person invests 500 at the end of each year with a bank which pays interest at 10% p. a C.I. annually. The amount standing to his credit three year after he has made his yearly? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A person invests 500 at the end of each year with a bank which pays interest at 10% p. a C.I. annually. The amount standing to his credit three year after he has made his yearly?.
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