Question

Find the compound interest on 800 at 5% per annum for 2 years.​

Answer 1

`C = 82`

Explanation:

Given

`R = 5\%` -- Rate

`P = 800` -- Principal

`N = 2` -- Time

Required

Determine the compound interest

First, we calculate the Amount (A)

`A = P(1 + R)^N`

`A = 800*(1 + 5\%)^2`

Express % as decimal

`A = 800*(1 + 0.05)^2`

`A = 800*(1.05)^2`

`A = 882`

The compound interest (C) is then calculated as:

`C = A -P` i.e. Amount - Principal

`C = 882 - 800`

`C = 82`