7. Mario invested Rs8,000 in a domain. She would be paid interest ar 5% per annum calculated annually. Find: (i) the amount credited against his name at end of third year.
Question
7. Mario invested Rs8,000 in a domain. She would be paid interest ar 5% per annum calculated annually. Find: (i) the amount credited against his name at end of third year.
Solution
To solve this problem, we need to use the formula for compound interest which is A = P(1 + r/n)^(nt).
Here, P = Principal amount (the initial amount) = Rs 8,000 r = annual interest rate (in decimal) = 5/100 = 0.05 t = time the money is invested for = 3 years n = number of times that interest is compounded per unit t = 1 (since it's annually)
Step 1: Substitute the given values into the formula A = 8000(1 + 0.05/1)^(1*3)
Step 2: Simplify the equation A = 8000(1 + 0.05)^3
Step 3: Calculate the amount A = 8000(1.05)^3 A = 8000 * 1.157625 A = Rs 9261.00
So, the amount credited against his name at the end of the third year would be Rs 9261.00.
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