Question

What is the compound interest of 10400 at 12.7% for 4 year

Answer 1

The Compound Interest of 10400 at 12.7% for 4 years is 6378.

The principal amount is given as 10400.

The rate of interest is given as 12.7%.

The time period to be calculated is given as 4 years.

The compound interest for the given above is to be calculated.

What is compound interest?

Compound interest is the interest that we earn both on the principal amount and the interest we earn.

The formula used to calculate compound interest is:                                  

   $P [ (1 + \frac{R}{100} )^n - 1 ]$

Where P = principal amount, R = rate of interest, and n = number of years.

We have,

P = 10400

R = 12.7%

n = 4 years

Compound interest:

$P [ (1 + \frac{R}{100} )^n - 1 ]\\\\10400 [ (1 + \frac{12.7}{100} )^4 - 1 ]$

Now,

10400 [ ( 1 + 0.12.7 )^2 - 1 ]

10400 [ 1.127^4 - 1 ]

10400 [ 1.61322 - 1 ]

10400 x 0.6132

6377.56

Rounding to the nearest whole number.

We have,

Compound Interest = 6378.

Thus the Compound Interest of 10400 at 12.7% for 4 years is 6378.

Learn more about Compound Interest here:

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