Question

Calculate the compound interest for the second year on $Rs.15,000$ invested for $2$ years at $6\%$ per annum.

Answer 1

Simple Interest $I=\frac{PNR}{100}$
Here for first year,
$P=Rs.15,000$
$N=1year$
$R=6\%$
So, Interest at the end of $1^{st}$ year $I=\frac{15,000\times 1\times 6}{100}=Rs.900$
Compound interest for the second year is the simple interest calculated on new principal after first year.
And for second year,
$P=Rs.15,000+Rs.900=Rs.15,900$
$N=1year$
$R=6\%$
$I=\frac{15,900\times 1\times 6}{100}=Rs.954$