To calculate the compound interest on Rs. 00 for 2 years at a given rate of interest per annum, you can use the compound interest formula:
Compound Interest=P(1+rn)nt−P\text{Compound Interest}=P\left(1+\frac{r}{n}\right)^{nt}-PCompound Interest=P(1+nr)nt−P
Where:
- PPP = principal amount (initial investment)
- rrr = annual interest rate (in decimal form, so 5% = 0.05)
- nnn = number of times interest is compounded per year (for annual compounding, n=1n=1n=1)
- ttt = time in years
If interest is compounded annually, the formula simplifies to:
Compound Interest=P(1+r)t−P\text{Compound Interest}=P(1+r)^t-PCompound Interest=P(1+r)t−P
For example, if the principal P=100P=100P=100 rupees, the rate of interest r=5%r=5%r=5% (0.05), and time t=2t=2t=2 years, then:
Compound Interest=100×(1+0.05)2−100=100×1.1025−100=110.25−100=10.25\text{Compound Interest}=100\times (1+0.05)^2-100=100\times 1.1025-100=110.25-100=10.25Compound Interest=100×(1+0.05)2−100=100×1.1025−100=110.25−100=10.25
So, the compound interest earned would be Rs. 10.25 after 2 years
. If you provide the exact principal amount and rate of interest, I can calculate the precise compound interest for you.
