ID : U-41709-72-8867-Compound-Interest [1]

Class 8
Compound Interest
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Answer the questions

1
(1) Find compound interest on Rs.15625 for 2 years at 7 % per annum compounded annually.
5
(2) Sara bought a car at Rs. 800000. If its value depreciates at the rate of 20% per annum, find the value of
the car after 2 years.
(3) Find the compound interest on Rs.30000 for 6 months at 8% per annum, compounded quarterly.
(4) Find the compound interest on Rs.80000 for 1 year at 10% per annum, compounded half yearly.
(5) At what rate percent per annum will a sum of Rs.10000 amount to Rs.11449 in 2 years, compounded
annually ?
(6) Find compound interest on Rs. 200 for 6 months at 10% per annum compounded half yearly.
(7) Find the amount of Rs.60000 after 2 years, compounded annually. The rate of interest is 6% per
annum during the first year and 13% per annum during the second year. Also, find the compound
interest.
(8) Find compound interest on Rs. 800000 for 3 years at 1% per annum compounded annually.
(9) The difference between the compound interest, compounded annually and the simple interest on a
certain sum for 2 years at 7% per annum is Rs.441. Find the sum.
(10) A certain sum amounts to Rs.52900 in 2 years at 15% per annum, compound interest, compounded
annually. Find the sum.
(11) Find compound interest on Rs. 50000 for 1 year and 6 months at 20% per annum compounded
annually.
(12) Sachin borrowed Rs. 40000 from a bank at the interest rate of 20% per annum compounded annually.
What would be the amount payable to bank after 3 years?
(13) Number of workers in a factory increases by 10% every year. If there are 300 workers in the factory,
find the number of workers in factory after 2 years.
(14) At the rate of 5% per annum compounded annually, how long would it take for a sum of Rs. 2000 to
compound to Rs. 2205.
(15) Population of a town increases by 1% every year. If current population of the town is 300000. Find the
population of town after 2 years.

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 ID : U-41709-72-8867-Compound-Interest [2]

Answers
(1) Rs.2331

Step 1
Given:
Principal
(P) = Rs.15625
Rate
1 36
(R) = 7 % = %
5 5
Time
(n) = 2 years
n
) , we have
R
Using the formula, A = P(1 +
100
2
Amount after 2 years = Rs.{15625 × (1 + )}
36
5 × 100
2
= Rs.{15625 × ( )}
536
500

}
134 134
= Rs.{15625 × ×
125 125

= Rs.(134 × 134)

= Rs.17956

Step 2

∴ Compound interest = Amount − Principal

= Rs.(17956 − 15625)
= Rs.2331

Step 3
Therefore, the compound interest is
Rs.2331.

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 ID : U-41709-72-8867-Compound-Interest [3]
(2) Rs. 512000

Step 1
We have been asked to find the value of the car after 2 years.

Step 2
Principal, P = Rs. 800000
Rate, R = 20%
Time, n = 2 years
R
Amount = P(1 - )n
100
20
= 800000(1 - )2
100
= 800000 × 0.64
= 512000

Step 3
Therefore, the value of car after the 2 years is Rs. 512000.

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 ID : U-41709-72-8867-Compound-Interest [4]
(3) Rs.1212

Step 1
Given:
Principal
(P) = Rs.30000
Time
(n) = 6 months
= 2 quarters
Rate
(R) = 8% per annum

= ( )% per quarter
8
4
= 2% per quarter
Step 2

n
) , we have
R
Using the formula, A = P(1 +
100
2
Amount after 6 months = 30000 × (1 + )
R
100
2
= 30000 × (1 + )
2
100
2
= 30000 × ( )
102
100
51 51
= 30000 × ×
50 50
= Rs.31212

Step 3

∴ Compound interest = Amount − Sum

= Rs.(31212 − 30000)
= Rs.1212

Step 4
Therefore, the compound interest is
Rs.1212.

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 ID : U-41709-72-8867-Compound-Interest [5]
(4) Rs.8200

Step 1
Given:
Principal
(P) = Rs.80000
Time
(n) = 1 year
= 2 half years
Rate
(R) = 10% per annum

=( )% per half year

10
2
= 5% per half year
Step 2

n
) , we have
R
Using the formula, A = P(1 +
100
2
Amount after 1 year = 80000 × (1 + )
R
100
2
= 80000 × (1 + )
5
100
2
= 80000 × ( )
105
100
21 21
= 80000 × ×
20 20
= Rs.88200

Step 3

∴ Compound interest = Amount − Sum

= Rs.(88200 − 80000)
= Rs.8200

Step 4
Therefore, the compound interest is
Rs.8200.

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 ID : U-41709-72-8867-Compound-Interest [6]
(5) 7%

Step 1
Given:
Sum
(P) = Rs.10000
Time
(n) = 2 years
Amount
(A) = Rs.11449
Let us assume that the rate percent per annum is
R%.
Step 2
Now,

2
A = P × (1 + )
R
100
2
⟹ 11449 = 10000 × (1 + )
R
100
2
⟹ (1 + ) =
R 11449
100 10000
2 2
⟹ (1 + ) =( )
R 107
100 100
R 107
⟹ 1+ =
100 100
R 107
⟹ = −1
100 100
7
⟹R= × 100 = 7
100

Step 3
Thus, the rate percent per annum is
7%.

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 ID : U-41709-72-8867-Compound-Interest [7]
(6) Rs. 10

Step 1
We have been asked to find the compound interest on Rs. 200 for 6 months at 10% per annum
compounded half yearly.

Step 2
Principal, P = Rs. 200
Number of terms, n = Number of half years in 6 months = 1
Interest Rate per annum = 10%, Interest Rate per term of half year, R = 10% ÷ 2 = 5%

Step 3
R
Amount = P(1 + )n
100
5
= 200(1 + )1
100
= 200 × 1.05
= Rs. 210

Step 4
Compound Interest = Amount - Principal
= 210 - 200
= Rs. 10

Step 5
Therefore, the compound interest is Rs. 10.

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 ID : U-41709-72-8867-Compound-Interest [8]
(7) Amount = Rs.71868
Compound interest = Rs.11868

Step 1
Given:
Principal
(P) = Rs.60000
R1 = 6%
R2 = 13%

)(1 + 2 ), we have
R1 R
Using the formula, A = P(1 +
100 100

Amount after 2 years = Rs.{60000 × (1 + ) × (1 + )}

6 13
100 100

)
106 113
= Rs.(60000 × ×
100 100
= Rs.71868

Step 2

∴ Compound interest = Amount − Principal

= Rs.(71868 − 60000)
= Rs.11868

Step 3
Therefore, the compound interest is
Rs.11868.

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 ID : U-41709-72-8867-Compound-Interest [9]
(8) Rs. 24240.8

Step 1
It is given that,
Principal, P = Rs. 800000
Rate, R = 1%
Time, n = 3 years
R
Amount = P(1 + )n
100
1
= 800000(1 + )3
100
= 800000(1.01)3
= 800000 × 1.030301
= Rs. 824240.8

Step 2
Compound interest = Amount - Principal
= 824240.8 - 800000
= 24240.8

Step 3
Therefore, the compound interest is Rs. 24240.8.

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 ID : U-41709-72-8867-Compound-Interest [10]
(9) Rs.90000

Step 1
Given:
Rate
(R) = 7%
Time
(n) = 2 years
Let us assume that the sum is
P.
Step 2

Compound Interest = P × (1 + ) −P
R
100
2
= P × (1 + ) −P
7
100

= (P × )−P
107 107
×
100 100
11449P
= −P
10000
1449P
=
10000

Step 3

P ×R×T
Simple Interest, SI =
100
P ×7×2
=
100
7P
=
50

Step 4
It is given that the difference between the compound interest and the simple interest is
Rs.441.
∴ CI − SI = 441
1449P 7P
⟹ − = 441
10000 50
49P
⟹ = 441
10000
10000
⟹ P = 441 × = 90000
49

Step 5
Thus, the sum is
Rs.90000.

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 ID : U-41709-72-8867-Compound-Interest [11]
(10) Rs.40000

Step 1
Let us assume that the sum is
P.
Step 2
Given:
Time
(n) = 2 years
Rate
(R) = 15%
Amount
(A) = Rs.52900
Step 3
Now,

2
A = P × (1 + )
R
100
2
⟹ 52900 = P × (1 + )
15
100
2
⟹ 52900 = P × ( )
115
100
20 20
⟹ P = 52900 × × = 40000
23 23

Step 4
Thus, the sum is
Rs.40000.

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 ID : U-41709-72-8867-Compound-Interest [12]
(11) Rs. 16000

Step 1
Principal, P = Rs. 50000
Rate, R = 20%
6
Time, n = 1 years and 6 months = 1 year
12

Step 2
For first 1 years, interest can be calculated using compound interest formula,
R
Amount = P [1 + ]n
100
20
Amount = 50000 [1 + ]1
100
= 50000 × 1.2
= Rs. 60000

Step 3
Since interest is compounded annually only, interest for remaining 6 month should be calculated
as simple interest on a principal of Rs. 60000,
(6/12)20
Amount after simple Interest for 6 months = 60000 [1 + ]
100
⇒      = 60000 × 1.1
⇒      = Rs. 66000

Step 4
Total interest = Amount - Principal
66000 - 50000
= Rs. 16000

Step 5
Therefore, the total compound interest is Rs. 16000.

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 ID : U-41709-72-8867-Compound-Interest [13]
(12) Rs. 69120

Step 1
It is given that,
Principal, P = Rs. 40000
Rate, R = 20%
Time, n = 3 years
R
Amount = P(1 + )n
100
20
= 40000(1 + )3
100
= 40000 × 1.728
= 69120

Step 2
Therefore, the amount payable to the bank after 3 years is Rs. 69120.

(13) 363

Step 1
It is give that,
Number of workers in the factory, P = 300
Yearly compounding rate, R = 10%
Time, n = 2 years

Step 2
R
Number of workers after 2 years = P(1 + ) n ...[Using compound interest formula]
100
10
  = 300(1 + )2
100
  = 300 × (1.1)2
  = 300 × 1.21
  = 363

Step 3
Therefore, the number of workers in the factory after 2 years is 363.

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 ID : U-41709-72-8867-Compound-Interest [14]
(14) Two years

Step 1
Let the time be n years.

Step 2
According to the question,
Principal, P = Rs. 2000
Rate, R = 5%
Amount = Rs. 2205

Step 3
Let's find the time.
R
Amount = P(1 + )n
100
5
⇒ 2205 = 2000(1 + )n
100
2205 105
⇒ =( )n
2000 100
105 105
⇒( )2 = ( )n
100 100
⇒n=2

Step 4
Therefore, in 2 years, Rs. 2000 will become Rs. 2205 at 5% per annum compounded annually.

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 ID : U-41709-72-8867-Compound-Interest [15]
(15) 306030

Step 1
Since population increases by 1% annually, we can use compound interest formula where current
population can be considered as principal.

Step 2
Current population or principal, P = 300000
Rate, R by which population increases every year = 1%
Time, n = 2 years

Step 3
R
Population of the town after 2 years or Amount = P [1 + ]n
100
1
= 300000 [1 + ]2
100
= 300000 × 1.0201
= 306030

Step 4
Therefore, the population of the town after 2 years will be 306030.

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