Answer:
- Amount: ₹5832
- Interest: ₹832
Explanation:
You want the amount and interest earned by ₹5000 in an account paying 8% compounded annually for 2 years.
Amount
The value of the account is given by ...
A = P(1 +r)^t
where principal P is invested at annual rate r for t years.
A = ₹5000(1.08^2) = ₹5832
The value of the investment is ₹5832.
Interest
The interest earned is the difference between the account value and the initial principal amount:
I = P -A
I = ₹5832 -5000 = ₹832
The compound interest earned is ₹832.
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