# Find CI when interest is compounded annually but Rates are different

To find CI when interest is compounded annually but rates are different, we use the following formula :**A = P( 1 + R**

_{1})( 1 + R_{2})... ( 1 + R_{n})Where P = Principal

R

_{1},R

_{2},R

_{3}...interest rates percent for different years.

**Examples :**

1) Roger bought a refrigerator for $ 4000 on credit. The rate of interest for the first year is 5% and of the second year is 15%. How much will it cost him if he pays the amount after two years.

**Solution:**

Here, P = $ 4000, R

_{1}= 5% p.a and R

_{2}= 15% p.a.

∴ Amount after 2 years = P( 1 + R

_{1})( 1 + R

_{2})

= 4,000 x ( 1 + 0.05) ( 1 + 0.15)

= 4000 x ( 1.05) ( 1.15 )

= 4000 x 1.2075

= $ 4830

∴ The refrigerator will cost $ 4830 to Roger.

_________________________________________________________________

2) Find the amount of $12,500 for 2 years compounded annually, the rate if interest being 15 % for the 1st year and 16 % for the second year.

Here, P = $12,500 , R

∴ Amount after 2 years = P( 1 + R

= 12,500x ( 1 + 0.15) ( 1 + 0.16)

= 12,500 x ( 1.15) ( 1.16 )

= 12,500 x 1.334

= $ 16,675

∴ Amount = $16,675

Home Page

Here, P = $12,500 , R

_{1}= 15 % and R

_{2}= 16 %

∴ Amount after 2 years = P( 1 + R

_{1})( 1 + R

_{2})

= 12,500x ( 1 + 0.15) ( 1 + 0.16)

= 12,500 x ( 1.15) ( 1.16 )

= 12,500 x 1.334

= $ 16,675

∴ Amount = $16,675

**Compound Interest(CI)**

• Find Compound Interest when interest is compounded Half yearly

• Find Compound Interest when interest is compounded Quarterly

• Find CI when interest is compounded annually but Rates are different

• Finding Principal

• Finding Time Period of Investment

• Finding Rate of Interest

• Find Compound Interest when interest is compounded Half yearly

• Find Compound Interest when interest is compounded Quarterly

• Find CI when interest is compounded annually but Rates are different

• Finding Principal

• Finding Time Period of Investment

• Finding Rate of Interest