Find compound interest in \(\frac{19}{7}\) years at the rate of 14% p.a. compounded annually, If the sum invested is Rs.10000/-.
Answer & explanation
Correct answer: option 2
\(\frac{19}{7}\) years = 2\(\frac{5}{7}\) years
Rate of interest for \(\frac{5}{7}\) years = \(\frac{5}{7}\) × 14% = 10%
14% = \(\frac{7}{50}\) and 10% = \(\frac{1}{10}\)
Principal Sum
1st year 50 57 (for 2 years → R% = 14%)
2nd year 50 57 (for \(\frac{5}{2}\) years → R% = 10%)
(Int on int.) 10 11
Total 25,000 35,739
C.I. = 35739 - 25000 = 10,739
Principal = 25000R = 10000 (given)
1R = 0.4
Hence, C.I. = 10739 × 0.4 = 4295.6