A person invests Rs. 8500 in a securities which pays 30% interest pa compounded annually. What is the approximate value of compound inetrest earned?

To calculate the compound interest, we use the formula:

\[
A = P \left(1 + \frac{r}{100}\right)^t
\]

Where:
- \(A\) = the amount (final value of investment)
- \(P\) = the principal (initial investment)
- \(r\) = annual interest rate
- \(t\) = time (in years)

Given:
- \(P = 8500\)
- \(r = 30\%\)
- \(t = 1\) year (since it's compounded annually)

Step 1: Calculate the amount \(A\).

\[
A = 8500 \times \left(1 + \frac{30}{100}\right)^1 = 8500 \times 1.30 = 11050
\]

Step 2: Calculate the compound interest.

\[
\text{Compound Interest} = A - P = 11050 - 8500 = 2550
\]

So, the approximate value of the compound interest earned is **Rs. 2550**.

Do you want more details or have any questions?

Here are 5 related questions for further exploration:
1. How would the compound interest change if the time period is 2 years?
2. What would be the value of the investment if the interest was compounded semi-annually?
3. How does compound interest differ from simple interest?
4. How does increasing the interest rate to 40% affect the compound interest?
5. What would the compound interest be for a different principal, say Rs. 10,000?

**Tip:** For better financial returns, always check how frequently the interest is compounded. More frequent compounding leads to higher interest earnings.

A person invests Rs. 8500 in securities which pays 30% interest pa compounded annually. What is the approximate value of compound interest earned?

Learn how to calculate the compound interest earned on an investment of Rs. 8500 at an annual interest rate of 30%. The interest is compounded annually, and this solution provides a step-by-step explanation of how to use the compound interest formula. Suitable for students in Grades 9-12.

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