Question: Find the amount compounded on Rs.9000 annually for 2 years if the rates of interest for two years are 8% and 10% respectively.


Answer: Rs 10692

Solution:
Given,
Principal (P) = Rs. 9000
Rate of interest for the first year (R_1) = 8%
Rate of interest for the second year (R_2) = 10%
To find: Compound amount after two years (CA) = ?

We know,
CA = P \left ( 1 + \dfrac{R_1}{100} \right )  \left ( 1 + \dfrac{R_2}{100} \right )

or, CA = P \left ( 1 + \dfrac{8}{100} \right )  \left ( 1 + \dfrac{10}{100} \right )

$or, CA = P \left ( \dfrac{100 + 8}{100} \right )  \left ( \dfrac{100+10}{100} \right )$

$or, CA = 9000  \left ( \dfrac{108}{100} \right )  \left ( \dfrac{110}{100} \right )$

or, CA = 9000 × \dfrac{11880}{10000}

\therefore CA = Rs. 10692

Hence, the required compound interest after two years is Rs. 10692.

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