Discussion
Albert invested an amount of Rs. 8000 in a fixed deposit scheme for 2 years at compound interest rate 5 p.c.p.a. How much amount will Albert get on maturity of the fixed deposit?
Answer: C
\[ A = P\left(1 + \frac{R}{100}\right)^{n}, \qquad \text{CI} = A - P, \qquad \text{SI} = \frac{PRn}{100} \]
\[ A = 8000 \times (1.05)^{2} = 8000 \times 1.1025 = \text{Rs. } 8820 \]
The interest is Rs. 820, of which Rs. 800 is simple interest and Rs. 20 is the second year's 5% on the first year's Rs. 400 - which is why Rs. 8800 is not the answer.
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