Find C.I on Rs. 16000 at the rate 5% p.c.p.a for 2 years compounded annually.

Answer

To find the compound interest (C.I) on Rs. 16,000 at a rate of 5% per annum for 2 years compounded annually, we will use the formula for compound interest:

### Step-by-Step Solution:

1. **Identify the Variables**:
- Principal (P) = Rs. 16,000
- Rate of Interest (R) = 5% per annum
- Time (n) = 2 years

2. **Use the Compound Interest Formula**:
The formula for compound interest is:
\[ C.I = P \left(1 + \frac{R}{100}\right)^n - P \]
Here, we will substitute the values of P, R, and n into the formula.

3. **Substitute the Values**:
\[ C.I = 16000 \left(1 + \frac{5}{100}\right)^2 - 16000 \]

4. **Calculate the Rate Component**:
\[ \frac{5}{100} = 0.05 \]
Therefore,
\[ 1 + 0.05 = 1.05 \]

5. **Calculate the Power**:
\[ (1.05)^2 = 1.05 \times 1.05 = 1.1025 \]

6. **Calculate the Total Amount**:
\[ Total\ Amount = 16000 \times 1.1025 = 17640 \]

7. **Calculate the Compound Interest**:
\[ C.I = 17640 - 16000 = 1640 \]

### Final Answer:
The compound interest on Rs. 16,000 at the rate of 5% per annum for 2 years is **Rs. 1640**.

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