8,000 is lent out at 7% compound interest
for 2 years. At the end of the first year
3,560 are returned. Calculate :
(i) the interest paid for the second year.
(ii) the total interest paid in two years
iii) the total amount of money paid in two
years to clear the debt.
Answer:
solution, principal =8000
rate=7%
time=2years
in first year
ci=(p(1+r/100)^t-1)
=(8000(1+10/100)^1-1)
=8000×0.1
=800
returned money=3560
8000-3560
=4440
second year
ci=(p(1+r/100)^t-1)
=4440×0.1
=444
total interest paid in two years =800+444
=1244