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Exercise 8.3
Question 1:
Calculate the amount and compound interest on:
1
(a) ₹ 10,800 for 3 years at 12 % per annum compounded annually.
2
1
(b) ₹ 18,000 for 2 years at 10% per annum compounded annually.
2
1
(c) ₹ 62,500 for 1 years at 8% per annum compounded annually.
2
(d) ₹ 8,000 for 1 years at 9% per annum compounded half yearly. (You could the
year by year calculation using S.I. formula to verify).
(e) ₹ 10,000 for 1 years at 8% per annum compounded half yearly.
Answer 1:
(a) Here,
Principal (P) = ₹ 10800, Time  n  = 3 years,
1 25
Rate of interest (R) = 12 %  %
2 2
n
 R 
Amount (A) = P 1  
 100 
3
 25 
= 10800 1  
 2 100 
3
 1 
= 10800 1  
 2 4 
3
 1
= 10800 1  
 8
3
9
= 10800  
8
9 9 9
= 10800   
8 8 8
= ₹ 15,377.34

Compound Interest (C.I.) = A – P = ₹ 10800 – ₹15377.34 = ₹4,577.34

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(b) Here,
1
Principal (P) = ₹ 18,000, Time  n  = 2 years, Rate of interest (R) = 10% p.a.
2
n
 R 
Amount (A) = P 1  
 100 
2
 10 
= 18000 1  
 100 
2
 1
= 18000 1  
 10 
2
 11 
= 18000  
 10 
11 11
= 18000  
10 10
= ₹ 21,780
1 1 21780 10 1
Interest for years on ₹ 21,780 at rate of 10% = 2 × = ₹ 1,089
2 100
1
Total amount for 2 years = ₹ 21,780 + ₹ 1089 = ₹ 22,869
2
Compound Interest (C.I.) = A – P = ₹ 22869 – ₹ 18000 = ₹ 4,869

(c) Here,
1 3
Principal (P) = ₹ 62500, Time  n  = 1 = years = 3 half-years (compounded
2 2
half yearly)
Rate of interest (R) = 8% = 4% (compounded half yearly)
n
 R 
Amount (A) = P 1  
 100 
2 3
 4   1 
= 62500 1   = 62500 1  
 100   25 
3
 26 
= 62500  
 25 
26 26 26
= 62500    = ₹ 70,304
25 25 25
Compound Interest (C.I.) = A – P = ₹ 70304 – ₹ 62500 = ₹ 7,804

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(d) Here,
Principal (P) = ₹ 8000, Time  n  = 1 years = 2 half-years(compounded half
yearly)
9
Rate of interest (R) = 9% = % (compounded half yearly)
2
n
 R 
Amount (A) = P 1  
 100 
2
 9 
= 8000 1  
 2 100 
2
 9 
= 8000 1  
 200 
2
 209 
= 8000  
 200 
209 209
= 8000  
200 200
= ₹ 8,736.20
Compound Interest (C.I.) = A – P = ₹ 8736.20 – ₹ 8000 = ₹ 736.20

(e) Here,
Principal (P) = ₹ 10,000, Time  n  = 1 years = 2 half-years (compounded half
yearly)
Rate of interest (R) = 8% = 4% (compounded half yearly)
n
 R 
Amount (A) = P 1  
 100 
2
 4 
= 10000 1  
 100 
2
 1 
= 10000 1  
 25 
2
 26 
= 10000  
 25 
26 26
= 10000   = ₹ 10,816
25 25
Compound Interest (C.I.) = A – P = ₹ 10,816 – ₹ 10,000 = ₹ 816

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Question 2:
Kamala borrowed ₹ 26,400 from a Bank to buy a scooter at a rate of 15% p.a.
compounded yearly. What amount will she pay at the end of 2 years and 4 months to clear
the loan?

(Hint: Find A for 2 years with interest is compounded yearly and then find SI on the 2 nd
4
year amount for years).
12
Answer 2:
Here,
Principal (P) = ₹ 26,400, Time  n  = 2 years 4 months, Rate of interest (R) = 15%
p.a.
n
 R 
Amount for 2 years (A) = P 1  
 100 
2
 15 
= 26400 1  
 100 
2
 3 
= 26400 1  
 20 
2
 23 
= 26400  
 20 
23 23
= 26400  
20 20
= ₹ 34,914

4 1
Interest for 4 months =  years at the rate of 15%
12 3
1 34914 15 1
= × = ₹ 1745.70
3 100

 Total amount = ₹ 34,914 + ₹ 1,745.70

= ₹ 36,659.70

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Question 3:
Fabina borrows ₹ 12,500 per annum for 3 years at simple interest and Radha borrows
the same amount for the same time period at 10% per annnum, compounded annually.
Who pays more interest and by how much?
Answer 3:
Here,
Principal (P) = ₹ 12,500, Time  T  = 3 years, Rate of interest (R) = 12% p.a.
P  R  T 12500 12  3
Simple Interest for Fabina = = = ₹ 4,500
100 100
Amount for Radha, P = ₹ 12,500, R = 10% and n = 3 years
n
 R 
Amount (A) = P 1  
 100 
3
 10 
= 12500 1  
 100 
3
 1
= 12500 1  
 10 
3
 11 
= 12500  
 10 
11 11 11
= 12500   
10 10 10
= ₹ 16,637.50
 C.I. for Radha = A – P = ₹ 16,637.50 – ₹ 12,500 = ₹ 4,137.50

Here, Fabina pays more interest = ₹ 4,500 – ₹ 4,137.50 = ₹ 362.50

Question 4:
I borrows ₹ 12,000 from Jamshed at 6% per annum simple interest for 2 years. Had I
borrowed this sum at 6% per annum compound interest, what extra amount would I have
to pay?
Answer 4:
Here,
Principal (P) = ₹12,000, Time  T  = 2 years, Rate of interest (R) = 6% p.a.

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P  R  T 12000  6  2
Simple Interest = = = ₹ 1,440
100 100
Had he borrowed this sum at 6% p.a., then
n
 R 
Compound Interest = P 1   P
 100 
2
 6 
= 12000 1    12000
 100 
2
 3 
= 12000 1   12000
 50 
2
 53 
= 12000    12000
 50 
53 53
= 12000   12000
50 50
= ₹ 13,483.20 – ₹ 12,000
= ₹ 1,483.20

Difference in both interests = ₹ 1,483.20 – ₹ 1,440.00 = ₹ 43.20

Question 5:
Vasudevan invested ₹ 60,000 at an interest rate of 12% per annum compounded half
yearly. What amount would he get:
(i) after 6 months?
(ii) after 1 year?

Answer 5:
Here, Principal (P) = ₹ 60,000,
Time  n  = 6 months = 1 half-year (compounded half yearly)
Rate of interest (R) = 12% = 6% (compounded half yearly)
n
 R 
Amount (A) = P 1  
 100 

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1
 6 
= 60000 1  
 100 
1
 3 
= 60000 1  
 50 
1
 53 
= 60000  
 50 
53
= 60000  = ₹ 63,600
50
After 6 months Vasudevan would get amount ₹ 63,600.

(ii) Here, Principal (P) = ₹ 60,000,

Time  n  = 1 year = 2 half-years (compounded half yearly)
Rate of interest (R) = 12% = 6% (compounded half yearly)
n
 R 
Amount (A) = P 1  
 100 
2
 6 
= 60000 1  
 100 
2
 3 
= 60000 1  
 50 
2
 53 
= 60000  
 50 
53 53
= 60000   = ₹ 67,416
50 50

After 1 year Vasudevan would get amount ₹ 67,416.

Question 6:
Arif took a loan of ₹ 80,000 from a bank. If the rate of interest is 10% per annum, find the
1
difference in amounts he would be paying after 1 years if the interest is:
2
(i) compounded annually.
(ii) compounded half yearly.

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Answer 6:
(i) Here,
1
Principal (P) = ₹ 80,000, Time  n  = 1 years, Rate of interest (R) = 10%
2
n
 R 
Amount for 1 year (A) = P 1  
 100 
1
 10 
= 80000 1  
 100 
1
 1
= 80000 1  
 10 
1
 11 
= 80000  
 10 
= ₹ 88,000
1 88000 10 1
Interest for year = = ₹ 4,400
2 100  2
Total amount = ₹ 88,000 + ₹ 4,400 = ₹ 92,400

(ii) Here, Principal (P) = ₹ 80,000,

1
Time  n  = 1 year = 3 half-years (compounded half yearly)
2
Rate of interest (R) = 10% = 5% (compounded half yearly)
n
 R 
Amount (A) = P 1  
 100 
3
 5 
= 80000 1  
 100 
3
 1 
= 80000 1  
 20 
3
 21 
= 80000  
 20 
21 21 21
= 80000    = ₹ 92,610
20 20 20

Difference in amounts = ₹ 92,610 – ₹ 92,400 = ₹ 210

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Question 7:
Maria invested ₹ 8,000 in a business. She would be paid interest at 5% per annum
compounded annually. Find:
(i) The amount credited against her name at the end of the second year.
(ii) The interest for the third year.
Answer 7:
(i) Here,
Principal (P) = ₹ 8000, Rate of Interest (R) = 5%, Time  n  = 2 years
n
 R 
Amount (A) = P 1  
 100 
2
 5 
= 8000 1  
 100 
2
 1 
= 8000 1  
 20 
2
 21 
= 8000  
 20 
21 21
= 8000   = ₹ 8,820
20 20

(ii) Here,
Principal (P) = ₹ 8000, Rate of Interest (R) = 5%, Time  n  = 3 years
n
 R 
Amount (A) = P 1  
 100 
3
 5 
= 8000 1  
 100 
3
 1 
= 8000 1  
 20 
3
 21 
= 8000  
 20 
21 21 21
= 8000    = ₹ 9,261
20 20 20

Interest for 3rd year = A – P = ₹ 9,261 – ₹ 8,820 = ₹ 441

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Question 8:
1
Find the amount and the compound interest on ₹ 10,000 for 1 years at 10% per annum,
2
compounded half yearly.
Would this interest be more than the interest he would get if it was compounded
annually?
Answer 8:
Here,
Principal (P) = ₹ 10000, Rate of Interest (R) = 10% = 5% (compounded half yearly)
1
Time  n  = 1 years = 3 half-years (compounded half yearly)
2
n
 R 
Amount (A) = P 1  
 100 
3
 5 
= 10000 1  
 100 
3
 1 
= 10000 1  
 20 
3
 21 
= 10000  
 20 
21 21 21
= 10000    = ₹ 11,576.25
20 20 20
Compound Interest (C.I.) = A – P = ₹ 11,576.25 – ₹ 10,000 = ₹ 1,576.25

If it is compounded annually, then

1
Here, Principal (P) = ₹ 10000, Rate of Interest (R) = 10%, Time  n  = 1 years
2
n
 R 
Amount (A) for 1 year = P 1  
 100 
1
 10 
= 10000 1  
 100 
1
 1
= 10000 1  
 10 
1
 11 
= 10000  
 10 

10

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11
= 10000  = ₹ 11,000
10
1 11000 110
Interest for year = = ₹ 550
2 2 100

 Total amount = ₹ 11,000 + ₹ 550 = ₹ 11,550

Now, C.I. = A – P = ₹ 11,550 – ₹ 10,000 = ₹ 1,550

Yes, interest ₹ 1,576.25 is more than ₹ 1,550.

Question 9:
1
Find the amount which Ram will get on ₹ 4,096, if he gave it for 18 months at 12 % per
2
annum, interest being compounded half yearly.
Answer 9:
Here, Principal (P) = ₹ 4096,
1 25 25
Rate of Interest (R) = 12  % = % (compounded half yearly)
2 2 4
1
Time  n  = 18 months = 1 years = 3 half-years (compounded half yearly)
2
n
 R 
Amount (A) = P 1  
 100 
3
 25 
= 4096 1  
 4 100 
3
 1 
= 4096 1  
 4 4 
3
 17 
= 4096  
 16 
17 17 17
= 4096   
16 16 16
= ₹ 4,913

11

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Question 10:
The population of a place increased to 54,000 in 2003 at a rate of 5% per annum.
(i) Find the population in 2001.
(ii) What would be its population in 2005?
Answer 10:
(i) Here, A2003 = 54,000, R = 5%, n = 2 years
Population would be less in 2001 than 2003 in two years.
Here population is increasing.
n
 R 
 A2003 = P2001 1  
 100 
2
 5 
 54000 = P2001 1  
 100 
2
 1 
 54000 = P2001 1  
 20 
2
 21 
 54000 = P2001  
 20 
21 21
 54000 = P2001  
20 20
54000  20  20
 P2001 
21 21
 P2001  48,980 (approx.)
(ii) According to question, population is increasing.
Therefore population in 2005,
n
 R 
A2005 = P 1  
 100 
2
 5 
= 54000 1  
 100 
2
 1 
= 54000 1  
 20 
2
 21 
= 54000  
 20 
21 21
= 54000   = 59,535
20 20
Hence population in 2005 would be 59,535.

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Question 11:
In a laboratory, the count of bacteria in a certain experiment was increasing at the rate of
2.5% per hour. Find the bacteria at the end of 2 hours if the count was initially 5,06,000.
Answer 11:
Here, Principal (P) = 5,06,000, Rate of Interest (R) = 2.5%, Time  n  = 2 hours
After 2 hours, number of bacteria,
n
 R 
Amount (A) = P 1  
 100 
2
 2.5 
= 506000 1  
 100 
2
 25 
= 506000 1  
 1000 
2
 1 
= 506000 1  
 40 
2
 41 
= 506000  
 40 
41 41
= 506000   = 5,31,616.25
40 40
Hence, number of bacteria after two hours are 531616 (approx.).

Question 12:
A scooter was bought at ₹ 42,000. Its value depreciated at the rate of 8% per annum. Find
its value after one year.
Answer 12:
Here, Principal (P) = ₹ 42,000, Rate of Interest (R) = 8%, Time  n  = 1 years
n
 R 
Amount (A) = P 1  
 100 
1
 8 
= 42000 1  
 100 

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1
 2 
= 42000 1  
 25 
1
 27 
= 42000  
 25 
27
= 42000  = ₹ 38,640
25
Hence, the value of scooter after one year is ₹ 38,640.

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