Compound Interest (Without using formula) Exercise Ex.

2(A)
Solution 1(a)
Correct option: (i) Rs. 880
For a particular year, R = 10%, Interest = Rs. 800

Amount = P + I = Rs. 8000 + Rs. 800 = Rs. 8800

For next year at compound interest,
P = Rs. 8800

Solution 1(b)
Correct option: (ii) Rs. 250

P = Rs. 5000, R = 10%, T = 6 months year

Solution 1(c)
Correct option: (iii) Rs. 512.50

For 1st year: P = Rs. 5000, R = 10%, T year

And, A = P + I = Rs. 5000 + Rs. 250 = Rs. 5250

For 2nd year: P = Rs. 5250, R = 10%, T year

And, A = P + I = Rs. 5250 + Rs. 262.50 = Rs. 5512.50

Therefore, compound interest = A - P = Rs. 5512.50 - 5000 = Rs. 512.50

Solution 1(d)
Correct option: (iii) Rs. 2,688
For 1st year: P = Rs. 20,000, R = 12%, T = 1 year

And, A = P + I = Rs. 20,000 + Rs. 2,400 = Rs. 22,400

For 2nd year: P = Rs. 22,400, R = 12%, T = 1 year

Solution 1(e)
Correct option: (i) Rs. 1,312.50
For a year 2022, R = 5%, Interest = Rs. 1,250

Amount = P + I = Rs. 25000 + Rs. 1250 = Rs. 26,250

For next year 2023 at compound interest,
P = Rs. 26,250

Solution 1(f)
Correct option: (ii) 23.2%
Let the initial value = Rs. 100
After one year, increase % = 10% of Rs. 100
Therefore, increased value = Rs. 110
After second year, increase % = 12% of Rs. 110
Therefore, increased value = Rs. 123.2
Now,

Solution 2

Final
Initial Interest
Year ↓ amount
amount (Rs.) (Rs.)
(Rs.)

1 st 16,000 800 16,800

2 nd 16,800 840 17,640

3 rd 17,640 882 18,522

4 th 18,522 926.10 19448.10

5 th 19448.10 972.405 20420.505

Thus, the amount in 4 years is Rs. 19448.10.

Solution 3

Solution 4

(i)
For 1st year
P = Rs. 4600
R = 10%
T = 1 year.

A = 4600 + 460 = Rs. 5060

For 2nd year
P = Rs. 5060
R = 12%
T = 1 year.
A= 5060 + 607.20 = Rs. 5667.20
Compound interest = 5667.20 - 4600
= Rs. 1067.20
Amount after 2 years = Rs. 5667.20

Solution 5

Solution 6

For 1st year

P = Rs. 16000
R = 10%
T = 1 year

A = 16000 + 1600 = 17600

For 2nd year,
P = Rs. 17600
R = 14%
T = 1 year
A = 17600 + 2464 = Rs. 20064
For 3rd year,
P = Rs. 20064
R = 15%
T = 1 year

Amount after 3 years = 20064 + 3009.60

= Rs. 23073.60
Compound interest = 23073.60 - 16000
= Rs. 7073.60

Solution 7

For 1st year

P = Rs. 8000
R = 10%
T = 1 year

A = 8000 + 800 = Rs. 8800

For 2nd year
P = Rs. 8800
R = 10%
T = 1 year

Compound interest for 2nd years = Rs. 880

Solution 8
For 1st years
P = Rs. 2400
R = 5%
T = 1 year

A = 2400 + 120 = Rs. 2520

For 2nd year
P = Rs. 2520
R = 5%
T = 1 year

A = 2520 + 126 = Rs. 2646

For final year,

P = Rs. 2646
R = 5%

T= year

Amount after years = 2646 + 66.15

= Rs. 2712.15
Compound interest = 2712.15 - 2400
= Rs. 312.15

Solution 9

For 1st year

P = Rs. 2500
R = 12%
T = 1 year
Amount = 2500 + 300 = Rs. 2800
For 2nd year
P = Rs. 2800
R = 12%
T = 1 year

Amount = 2800 + 336 = Rs. 3136

Amount repaid by A to B = Rs. 2936
The amount of watch =Rs. 3136 - Rs. 2936 = Rs. 200

Solution 10

Solution 11

To calculate S.I.
P=Rs18,000; R=10% and T=1year
S.I.= Rs = Rs1,800
To calculate C.I.
For 1st half- year
P= Rs18,000; R=10% and T= 1/2year

Interest= Rs = Rs900
Amount= Rs18,000+ Rs900= Rs18,900
For 2nd year
P= Rs18,900; R= 10% and T= 1/2year

Interest= Rs = Rs945
Amount= Rs18,900+ Rs945= Rs19,845
Compound interest= Rs19,845- Rs18,000= Rs1,845
His gain= Rs1,845 - Rs1,800= Rs45

Solution 12

Compound Interest (Without using formula) Exercise Ex. 2(B)

Solution 1(e)
Correct option: (iii) Rs. 4,000
Let the Principal = Rs. 100
Then,
For S.I.: P = Rs. 100, R = 5% and T = 2 years

For C.I.:
Principal for 1st year = Rs. 100

And, amount = Rs. 100 + Rs. 5 = Rs. 105

Then, Principal for 2nd year = Rs. 105

Then, C.I. of 2 years = Rs. 5 + Rs. 5.25 = Rs. 10.25

Difference between C.I. and S.I. = Rs. 10.25 – Rs. 10 = Rs. 0.25
When difference between C.I. and S.I. for 2 years is Rs. 0.25, Principal = Rs. 100
Therefore, when the difference between C.I. and S.I. for 2 years is Rs. 100,

Principal

Solution 1(a)
Correct option: (i) Rs. 00
C.I. and S.I. are same for the first year on the same sum and at the same rate percent.

Solution 1(b)
Correct option: (ii) 572.80
For year 2023:
Since money deposited at the beginning of the year = Rs. 2,000
Principal for year 2023 = Rs. 2,000

And, amount = Rs. 2,000 + Rs. 160 = Rs. 2160

For year 2024:
Since money deposited at the beginning of the year = Rs. 3,000
Principal for year 2024 = Rs. 2,160 + Rs. 3,000 = Rs. 5,160

And, amount = Rs. 5,160 + Rs. 412.80 = Rs. 5572.80

Therefore, compound interest at the end of 2024 = Rs. 160 + Rs. 412.80 = Rs. 572.80

*Back answer is different.

Solution 1(c)
Correct option: (i) Rs. 880
For 1st year:
P = Rs. 1000, R = 10%, T = 1 year

And, amount = Rs. 1000 + Rs. 100 = Rs. 1100

Money repaid = Rs. 300
∴ Balance = Rs. 1100 - Rs. 300 = Rs. 800
For 2nd year:
P = Rs. 800, R = 10%, T = 1 year

And, amount = Rs. 800 + Rs. 80 = Rs. 880

Solution 1(d)
Correct option: (iv) Rs. 40
For S.I.: P = Rs. 4000, R = 10% and T = 2 years

For C.I.:
Principal for 1st year = Rs. 4000

And, amount = Rs. 4000 + Rs. 400 = Rs. 4400

Then, Principal for 2nd year = Rs. 4400

Then, C.I. of 2 years = Rs. 400 + Rs. 440 = Rs. 840

Therefore, difference between C.I. and S.I. = Rs. 840 - Rs. 800 = Rs. 40

Solution 2

For 1st year

P = Rs. 4000
R=8
T = 1 year

A = 4000 + 320 = Rs. 4320

For 2nd year
P = Rs. 4320
R=8%
T = 1 year
A = 4320 + 345.60 = 4665.60
Compound interest = Rs. 4665.60 - Rs. 4000
= Rs. 665.60

Simple interest for 2 years =

= Rs. 640
Difference of CI and SI = 665.60 - 640
= Rs 25.60

Solution 3

Let money be Rs100

For 1st year
P=Rs100; R=8% and T= 1year

Interest for the first year= Rs = Rs8

Amount= Rs100+ Rs8= Rs108
For 2nd year
P=Rs108; R=8% and T= 1year

Interest for the second year= Rs = Rs8.64

Difference between the interests for the second and first year = Rs8.64 - Rs8 = Rs0.64
Given that interest for the second year exceeds the first year by Rs.96
When the difference between the interests is Rs0.64, principal is Rs100

When the difference between the interests is Rs96, principal=Rs =Rs15,000

Solution 4

(i) For 1st years

P = Rs. 5600
R = 14%
T = 1 year
(ii) Amount at the end of the first year
= 5600 + 784
= Rs. 6384
(iii) For 2nd year
P = 6384
R = 14%
R = 1 year

= Rs. 893.76
= Rs. 894 (nearly)

Solution 5

Savings at the end of every year = Rs. 3000

For 2nd year
P = Rs. 3000
R = 10%
T = 1 year

A = 3000 + 300 = Rs. 3300

For third year, savings = 3000
P = 3000 + 3300 = Rs. 6300
R = 10%
T = 1 year

A = 6300 + 630 = Rs. 6930

Amount at the end of 3rd year
= 6930 + 3000
= Rs. 9930
Solution 6

For 1st year

P = Rs. 12500
R = 12%
R = 1 year

A = 12500 + 1500 = Rs. 14000

For 2nd year
P = Rs. 14000
R = 15%
T = 1 year

A = 1400 + 2100 = Rs. 16100

For 3rd year
P = Rs. 16100
R = 18%
T = 1 year

A = 16100 + 2898 = Rs. 18998

Difference between the compound interest of the third year and first year
= Rs. 2898 - Rs. 1500
= Rs. 1398

Solution 7
Solution 8

For 1st six months:

P = Rs. 5,000, R = 12% and T = year

∴ Interest = = Rs. 300

And, Amount = Rs. 5,000 + Rs. 300 = Rs. 5,300
Since money repaid = Rs. 1,800
Balance = Rs. 5,300 - Rs. 1,800 = Rs. 3,500

For 2nd six months:

P = Rs. 3,500, R = 12% and T = year

∴ Interest = = Rs. 210

And, Amount = Rs. 3,500 + Rs. 210 = Rs. 3,710
Again money repaid = Rs. 1,800
Balance = Rs. 3,710 - Rs. 1,800 = Rs. 1,910

For 3rd six months:

P = Rs. 1,910, R = 12% and T = year

∴ Interest = = Rs. 114.60

And, Amount = Rs. 1,910 + Rs. 114.60 = Rs. 2,024.60

Thus, the 3rd payment to be made to clear the entire loan is 2,024.60.

Solution 9

Let principal (p = Rs. 100

R = 10%
T = 1 year

SI =

Compound interest payable half yearly

R = 5% half yearly

T= year = 1 half year

For first year

I=
A = 100 + 5 = Rs. 105

For second year

P = Rs. 105

Total compound interest = 5 + 5.25

= Rs. 10.25
Difference of CI and SI = 10.25- 10
= Rs. 0.25
When difference in interest is Rs. 10.25, sum = Rs. 100

If the difference is Rs. 1 ,sum =

If the difference is Rs. = 180,sum =

= Rs. 72000
Solution 10

Solution 11
Compound Interest (Without using formula) Exercise Ex. 2(C)
Solution 1(a)

Correct option: (iv) 20%

The difference between the compound interest for any two consecutive conversion periods is the
interest of one period on the C.I. of the preceding conversion period.
Here,
Difference in compound interest for two consecutive years = Rs. 360 - Rs. 300 = Rs. 60

Now,

Solution 1(b)

Correct option: (ii) 20%

The difference between the amounts for any two consecutive conversion periods is the interest of one
period on the C.I. of the preceding period.
Here,
Difference in amounts for 6th year and 5th years = Rs. 6000 - Rs. 5000 = Rs. 1000

Now,

Solution 1(c)

Correct option: (i) 3500

Let C.I. at the end of 2019 = Rs. x
Since, C.I. at the end of 2020 = C.I. of year 2019 + Interest on its for one year
∴ Rs. 3850 = Rs. x + 10% of Rs. x
Solution 1(d)

Correct option: (ii) 5,040

Amount in 7 years = Amount in 6 years + Interest on it for 1 year
= Rs. 4500 + 12% of Rs. 4500

Solution 1(e)

Correct option: (iii) 15%

Amount in 2nd year = Amount in 1st year + Interest on it for 1 year
Rs. 690 = Rs. 600 + R% of Rs. 600

Solution 1(f)

Correct option: (ii) 15%

Amount in 2nd year = Amount in 1st year + Interest on it for 1 year
Rs. 2760 = Rs. 2400 + R% of Rs. 2400

Solution 2

(i)Amount in two years= Rs5,292

Amount in three years= Rs5,556.60
Difference between the amounts of two successive years
= Rs5,556.60 - Rs5,292= Rs264.60
Rs264.60 is the interest of one year on Rs5,292

Rate of interest= Rs %= %= 5%
(ii) Let the sum of money= Rs100
Interest on it for 1st year= 5% of Rs100= Rs5
Amount in one year= Rs100+ Rs5= Rs105
Similarly, amount in two years= Rs105+ 5% of Rs105
= Rs105+ Rs5.25
= Rs110.25
When amount in two years is Rs110.25, sum = Rs100

When amount in two years is Rs5,292, sum = Rs

= Rs4,800

Solution 3

For 1st year

P=Rs8,000; A=9,440 and T= 1year
Interest= Rs9,440 - Rs8,000= Rs1,440

Rate= %= %=18%
For 2nd year
P= Rs9,440; R=18% and T= 1year

Interest= Rs = Rs1,699.20
Amount= Rs9,440 + Rs1,699.20= Rs11,139.20
For 3rd year
P= Rs11,139.20; R=18% and T= 1year

Interest= Rs = Rs2,005.06

Solution 4

(i)C.I. for second year = Rs1,089

C.I. for third year = Rs 1,197.90
Difference between the C.I. of two successive years
= Rs1,197.90 - Rs1089= Rs108.90
Rs108.90 is the interest of one year on Rs1089

Rate of interest= Rs %= %= 10%

(ii) Let the sum of money= Rs100
Interest on it for 1st year= 10% of Rs100= Rs10
Amount in one year= Rs100+ Rs10= Rs110
Similarly, C.I. for 2nd year= 10% of Rs110
= Rs11
When C.I. for 2nd year is Rs11, sum = Rs100
 When C.I. for 2nd year is Rs1089, sum = Rs = Rs9,900

Solution 5

Solution 6

(i)

Difference between depreciation in value between the first and second years
Rs.4,000 - Rs.3,600 = Rs.400
⇒ Depreciation of one year on Rs.4,000 = Rs.400

(ii)

Let Rs.100 be the original cost of the machine.

Depreciation during the 1st year = 10% of Rs.100 = Rs.10

When the values depreciates by Rs.10 during the 1st year, Original cost = Rs.100

⇒When the depreciation during 1st year = Rs.4,000,

The original cost of the machine is Rs.40,000.

(iii)

Total depreciation during all the three years

= Depreciation in value during(1st year + 2nd year + 3rd year)
= Rs.4,000 + Rs.3,600 + 10% of (Rs.40,000 - Rs.7,600)
= Rs.4,000 + Rs.3,600 + Rs.3,240
= Rs.10,840

The cost of the machine at the end of the third year

= Rs.40,000 - Rs.10,840 = Rs.29,160

Solution 7

For 1st year

P=Rs12,800; R=10% and T= 1year

Interest= Rs = Rs1,280
Amount= Rs12,800+ Rs1,280= Rs14,080
For 2nd year
P=Rs14,080; R=10% and T= 1 year

Interest= Rs = Rs1,408
Amount= Rs14,080+ Rs1,408= Rs15,488
For 3rd year
P=Rs15,488; R=10% and T= 1year

Interest= Rs = Rs1,548.80
Amount= Rs15,488+ Rs1,548.80= Rs17,036.80

Solution 8

Difference between the C.I. of two successive half-years

= Rs760.50 - Rs650= Rs110.50
Rs110.50 is the interest of one half-year on Rs650

Rate of interest= Rs %= %= 34%

Solution 9

For 1st half-year

P= Rs15,000; A= Rs15,600 and T= ½ year
Interest= Rs15,600 - Rs15,000= Rs600

Rate= %= %= 8% Ans.
For 2nd half-year
P= Rs15,600; R=8% and T= ½ year

Interest= Rs = Rs624
Amount= Rs15,600 + Rs624= Rs16,224
For 3rd half-year
P= Rs16,224; R=8% and T= ½ year

Interest= Rs = Rs648.96
Amount= Rs16,224+ Rs648.96= Rs16,872.96 Ans.

Solution 10

(i) For 1st year

P= Rs8,000; R=7% and T=1year

Interest= Rs = Rs560
Amount= Rs8,000+ Rs560= Rs8,560
Money returned= Rs3,560
Balance money for 2nd year= Rs8,560- Rs3,560= Rs5,000
For 2nd year
P= Rs5,000; R=7% and T=1year

Interest paid for the second year= Rs = Rs350 Ans.

(ii)The total interest paid in two years= Rs350 + Rs560
= Rs910 Ans.
(iii) The total amount of money paid in two years to clear the debt
= Rs8,000+ Rs910
= Rs8,910 Ans.

Solution 11

Let the sum of money be Rs 100

Rate of interest= 10%p.a.
Interest at the end of 1st year= 10% of Rs100= Rs10
Amount at the end of 1st year= Rs100 + Rs10= Rs110
Interest at the end of 2nd year=10% of Rs110 = Rs11
Amount at the end of 2nd year= Rs110 + Rs11= Rs121
Interest at the end of 3rd year=10% of Rs121= Rs12.10
 Difference between interest of 3rd year and 1st year
=Rs12.10- Rs10=Rs2.10
When difference is Rs2.10, principal is Rs100

When difference is Rs252, principal = =Rs12,000 Ans.

Solution 12

For 1st year

P= Rs10,000; R=10% and T= 1year

Interest= Rs =Rs1,000
Amount at the end of 1st year=Rs10,000+Rs1,000=Rs11,000
Money paid at the end of 1st year=30% of Rs10,000=Rs3,000
Principal for 2nd year=Rs11,000- Rs3,000=Rs8,000
For 2nd year
P=Rs8,000; R=10% and T= 1year

Interest= Rs = Rs800
Amount at the end of 2nd year=Rs8,000+Rs800= Rs8,800
Money paid at the end of 2nd year=30% of Rs10,000= Rs3,000
Principal for 3rd year=Rs8,800- Rs3,000=Rs5,800 Ans.

Solution 13

For 1st year

P= Rs10,000; R=10% and T= 1year

Interest= Rs =Rs1,000
Amount at the end of 1st year=Rs10,000+Rs1,000=Rs11,000
Money paid at the end of 1st year=20% of Rs11,000=Rs2,200
Principal for 2nd year=Rs11,000- Rs2,200=Rs8,800
For 2nd year
P=Rs8,800; R=10% and T= 1year

Interest= Rs = Rs880
Amount at the end of 2nd year=Rs8,800+Rs880= Rs9,680
Money paid at the end of 2nd year=20% of Rs9,680= Rs1,936
Principal for 3rd year=Rs9,680- Rs1,936=Rs7,744 Ans.

Compound Interest (Without using formula) Exercise Test Yourself

Solution 1

Let principal (p) = Rs. 100

For 1st year
P = Rs. 100
R = 10%
T = 1 year

A = 100 + 10 = Rs. 110

For 2nd year
P = Rs. 110
R = 11%
T = 1 year

A = 110 + 12.10 = Rs. 122.10

If Amount is Rs. 122.10 on a sum of Rs. = 100

If amount is Rs. 1, sum =

If amount is Rs. 6593.40, sum =

= Rs. 5400

Solution 2

Let the value of machine in the beginning= Rs. 100

For 1st year depreciation = 10% of Rs. 100 = Rs. 100
Value of machine for second year = 100 - 10
= Rs. 90
For 2nd year depreciation = 10% of 90 = Rs. 9
Value of machine for third year = 90 - 9
= Rs. 81
For 3rd year depreciation = 15% of 81
= Rs. 12.15
Value of machine at the end of third year = 81 - 12.15
= Rs. 68.85
Net depreciation = Rs. 100 - Rs. 68.85
= Rs. 31.15
Or 31.15%

Solution 3

For 1st half-year

P=Rs12,000; R=10% and T=1/2 year

Interest= Rs = Rs600
Amount= RS12,000 + Rs600= Rs12,600
Money paid at the end of 1st half year=Rs4,000
Balance money for 2nd half-year= Rs12,600- Rs4,000=Rs8,600

For 2nd half-year

P=Rs8,600; R=10% and T=1/2 year

Interest=Rs =Rs430
Amount= Rs8,600+ Rs430= Rs9,030
Money paid at the end of 2nd half-year=Rs4,000
Balance money for 3rd half-year= Rs9,030- Rs4,000=Rs5,030

For 3rd half-year

P=Rs5,030; R=10% and T=1/2 year

Interest = Rs = Rs251.50
Amount= Rs5,030 + Rs251.50= Rs5,281.50

Solution 4

Let Principal= Rs 100

For 1st year
P=Rs100; R=10% and T=1year
Interest= Rs = Rs10
Amount= Rs100 + Rs10= Rs110
For 2nd year
P=Rs110; R=10% and T= 1year

Interest= Rs = Rs11
Amount= Rs110 + Rs11= Rs121
For 3rd year
P=Rs121; R=10% and T= 1year

Interest= Rs = Rs12.10
Sum of C.I. for 1st year and 3rd year=Rs10+Rs12.10=Rs22.10
When sum is Rs22.10, principal is Rs100

When sum is Rs2,652, principal =Rs =Rs12,000 Ans.

Solution 5

Let original value of machine=Rs100

For 1st year
P=Rs100; R=12% and T= 1year

Depreciation in 1st year= Rs =Rs12

Value at the end of 1st year=Rs100 - Rs12=Rs88
For 2nd year
P= Rs88; R=12% and T= 1year

Depreciation in 2nd year= Rs =Rs10.56

When depreciation in 2nd year is Rs10.56, original cost is Rs100

When depreciation in 2nd year is Rs2,640, original cost=

=Rs25,000

Solution 6

Let Rs. x be the sum.

Compound interest
For 1st year:
P = Rs.x, R = 8% and T=1

For 2nd year:

P = Rs.x + Rs. 0.08x = Rs. 1.08x

Amount = 1.08x + 0.0864x = Rs. 1.1664x

CI = Amount - P = 1.1664x - x = Rs. 0.1664x
The difference between the simple interest and compound interest at the rate of 8% per annum
compounded annually should be Rs. 64 in 2 years.
⇒ Rs. 0.1664x - Rs. 0.16x = Rs.64
⇒ Rs. 0.0064x = Rs.64
⇒ x = 10000

Hence the sum is Rs. 10000.

Solution 7

For 1st year

P=Rs13,500; R=16% and T= 1year

Interest= Rs = Rs2,160
Amount= Rs13,500 + Rs2,160= Rs15,660
For 2nd year
P=Rs15,660; R=16% and T= 1year

Interest= Rs = Rs2,505.60
=Rs2,506

Solution 8

For 1st year

P=Rs48,000; R=10% and T= 1year
Interest= Rs = Rs4,800
Amount= Rs48,000+ Rs4,800= Rs52,800
For 2nd year
P=Rs52,800; R=10% and T= 1year

Interest= Rs = Rs5,280
Amount= Rs52,800+ Rs5,280= Rs58,080
For 3rd year
P=Rs58,080; R=10% and T= 1year

Interest= Rs = Rs5,808

Solution 9

(i)
Let x% be the rate of interest charged.

For 1st year:

P = Rs.12,000, R = x% and T = 1

For 2nd year:

After a year, Ashok paid back Rs.4,000.
P = Rs.12,000 + Rs.120x - Rs.4,000 = Rs.8,000 + Rs.120x

The compound interest for the second year is Rs.920

Rs. (80x + 1.20x2) = Rs.920
⇒1.20x2 + 80x - 920 = 0
⇒3x2 + 200x - 2300 = 0
⇒3x2 + 230x - 30x - 2300 = 0
⇒x(3x + 230) -10(3x + 230) = 0
⇒(3x + 230)(x - 10) = 0
⇒x = -230/3 or x = 10

As rate of interest cannot be negative so x = 10.

Therefore the rate of interest charged is 10%.
(ii)

For 1st year:

Interest = Rs.120x = Rs.1200

For 2nd year:

Interest = Rs.(80x + 1.20x2) = Rs.920

The amount of debt at the end of the second year is equal to the addition of principal of the second
year and interest for the two years.

Debt = Rs.8,000 + Rs.1200 + Rs.920 = Rs.10,120

Solution 10