Answer:
Step-by-step explanation:
Compound Interest Formula, Amount, [tex]A(n)=P(1+r)^n[/tex]
Interest=Amount - Principal
[tex]I=P(1+r)^n-P[/tex]
At the end of 1 year, interest =Rs450, therefore:
[tex]450=P(1+r)-P\\450=P+Pr-P\\450=Pr[/tex]
At the end of 2 years, interest =Rs945, therefore:
[tex]945=P(1+r)^2-P\\945=P(1+r)(1+r)-P\\945=P(1+r+r+r^2)-P\\945=P(1+2r+r^2)-P\\945=P+2Pr+Pr^2-P\\945=2Pr+Pr^2[/tex]
Recall: Pr=450
Therefore:
[tex]945=2(450)+Pr^2\\945-900=Pr^2\\Pr^2=45[/tex]
Comparing Pr=450 and [tex]Pr^2=45[/tex]
[tex]\dfrac{Pr^2}{Pr}= \dfrac{45}{450}\\r=0.1[/tex]
Substitute r=0.1 to obtain P
0.1P=450
P=Rs4500
Therefore:
