1
Identify values - P = 8000, R = 15%, T = 2 years
2
Apply formula - A = P(1 + R/100)^T
5
A = 8000 × 1.3225 = Rs. 10,580
6
CI = Amount - Principal = 10,580 - 8000 = Rs. 2,580
Worked Example 2:
A sum becomes Rs. 13,230 in 2 years and Rs. 15,214.50 in 3 years at compound interest. Find the principal and rate.
1
Let principal = P, rate = R%
2
After 2 years: P(1 + R/100)² = 13,230
3
After 3 years: P(1 + R/100)³ = 15,214.50
4
Divide equation 2 by equation 1: (1 + R/100) = 15,214.50/13,230 = 1.15
5
Therefore, R/100 = 0.15, so R = 15%
6
Substitute in equation 1: P(1.15)² = 13,230
8
P = 13,230/1.3225 = Rs. 10,000
Time-Saving Trick: When amount after n years and (n+1) years are given, rate = [(Amount after (n+1) years / Amount after n years) - 1] × 100
Most Common Mistake: Students frequently confuse the compounding frequency. When interest is compounded half-yearly, they forget to double the time period and halve the rate