Question

Calculate the amount and compound interest on
$Rs.10,800$ for $3$ years at $12\frac{1}{2}\%$ per annum compounded annually.

Answer 1

Here, Prinicipal (P) $=Rs.10800,$ Time (n) $=3$ years,

Rate of interest (R) = $12\frac{1}{2}\%=\frac{25}{2}\%$

Amount, A $=P{(1+\frac{R}{100})}^n$

$=10800{(1+\frac{25}{2\times 100})}^3$

$=10800{(1+\frac{1}{8})}^3$

$=10800{\left(\frac{9}{8}\right)}^3$

$=10800\times \frac{9}{8}\times \frac{9}{8}\times \frac{9}{8}$

$=Rs.15,377.34$

Compound Interest (C.I) = A - P $=Rs.10800-Rs.15377.34$

$=Rs.4,577.34$