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If P = 1,000, R = 5% p.a, n = 4; What is Amount and C.I. isa.1,215.50, 215.50b.1,125, 125c.2,115, 115d.2,215, 215

Question

If P = 1,000, R = 5% p.a, n = 4; What is Amount and C.I.

a. 1,215.50, 215.50
b. 1,125, 125
c. 2,115, 115
d. 2,215, 215

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Solution

The question is asking for the total amount and compound interest (C.I.) given the principal (P), rate of interest (R), and number of years (n). The formula for compound interest is A = P(1 + R/n)^(nt), where A is the amount of money accumulated after n years, including interest.

Given: P = 1,000 R = 5% per annum = 0.05 (in decimal form) n = 4 years

Step 1: Convert the rate from percentage to decimal form. R = 5/100 = 0.05

Step 2: Substitute the values into the formula. A = 1000(1 + 0.05/1)^(1*4) A = 1000(1 + 0.05)^4 A = 1000(1.05)^4 A = 1000 * 1.21550625 A = 1215.50625

The total amount after 4 years will be approximately 1215.51 (when rounded to the nearest penny).

The compound interest (C.I.) is the total amount minus the principal. C.I. = A - P C.I. = 1215.51 - 1000 C.I. = 215.51

So, the answer is a. 1,215.50, 215.50.

This problem has been solved

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