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On what sum will the compound interest at 5% per annum for two years compounded annually be 1640
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On what sum will the compound interest at 5% per annum for two year...
Given:
- Principal amount (P) = ?
- Rate of interest (R) = 5% per annum
- Time (T) = 2 years
- Compound interest (CI) = 1640
Formula:
The formula to calculate compound interest is: A = P(1 + R/100)^T, where A is the final amount including interest.
Step 1: Determine the final amount (A)
We can use the compound interest formula to find the final amount (A) after 2 years:
A = P(1 + R/100)^T
Step 2: Substitute the given values into the formula
A = P(1 + 5/100)^2
Step 3: Simplify the equation
A = P(1 + 0.05)^2
A = P(1.05)^2
A = 1.1025P
Step 4: Calculate the principal amount (P)
We are given that the compound interest (CI) is 1640. Since compound interest is the difference between the final amount and the principal amount, we can write the equation:
CI = A - P
Substituting the values, we get:
1640 = 1.1025P - P
1640 = 0.1025P
Step 5: Solve for P
To find the principal amount (P), we divide both sides of the equation by 0.1025:
P = 1640/0.1025
P ≈ 16,000
Therefore, the principal amount required to have a compound interest of 1640 at a rate of 5% per annum for two years compounded annually is approximately 16,000.
- Principal amount (P) = ?
- Rate of interest (R) = 5% per annum
- Time (T) = 2 years
- Compound interest (CI) = 1640
Formula:
The formula to calculate compound interest is: A = P(1 + R/100)^T, where A is the final amount including interest.
Step 1: Determine the final amount (A)
We can use the compound interest formula to find the final amount (A) after 2 years:
A = P(1 + R/100)^T
Step 2: Substitute the given values into the formula
A = P(1 + 5/100)^2
Step 3: Simplify the equation
A = P(1 + 0.05)^2
A = P(1.05)^2
A = 1.1025P
Step 4: Calculate the principal amount (P)
We are given that the compound interest (CI) is 1640. Since compound interest is the difference between the final amount and the principal amount, we can write the equation:
CI = A - P
Substituting the values, we get:
1640 = 1.1025P - P
1640 = 0.1025P
Step 5: Solve for P
To find the principal amount (P), we divide both sides of the equation by 0.1025:
P = 1640/0.1025
P ≈ 16,000
Therefore, the principal amount required to have a compound interest of 1640 at a rate of 5% per annum for two years compounded annually is approximately 16,000.
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On what sum will the compound interest at 5% per annum for two years compounded annually be 1640?
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On what sum will the compound interest at 5% per annum for two years compounded annually be 1640? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about On what sum will the compound interest at 5% per annum for two years compounded annually be 1640? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for On what sum will the compound interest at 5% per annum for two years compounded annually be 1640?.
On what sum will the compound interest at 5% per annum for two years compounded annually be 1640? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about On what sum will the compound interest at 5% per annum for two years compounded annually be 1640? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for On what sum will the compound interest at 5% per annum for two years compounded annually be 1640?.
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