Answer:
I. Amount = 5618 Rupees
II. Compound interest = 618 Rupees
Step-by-step explanation:
- Given the following data;
- Principal = 5000 Rupees
- Time = 2 years
- Interest rate = 6%
To find the compound interest;
Mathematically, compound interest is calculated using the formula;
A = P(1 + r)^t
Where;
- A is the future value.
- P is the principal or starting amount.
- r is annual interest rate.
- t is the number of years for the compound interest.
Substituting into the formula, we have;
A = 5000(1 + 0.06)^2
A = 5000(1.06)^2
A = 5000 * 1.1236
A = 5618 Rupees
Next, we would determine the compound interest using the formula;
C.I = A - P
C.I = 5618 - 5000
Compound interest (C.I) = 618 Rupees
