Question

A man invests Rs. $30,800$ at $5$% per annum compound interest for $3$ years. Calculate:

the interest for the first year.

• A. Rs. $1,540$
• B. Rs. $1,627$
• C. Rs. $1,721$
• D. Rs. $1,863$

Answer 1

The correct option is A Rs. $1,540$

Given,
Principle, $P=30800$.
Rate of interest, $R=5$%.
Time, $T=3$years.
Compound interest is given as,
$CI=P\left[\right(1+\frac{R}{100}{)}^T-1]$ ...... (1)
Put $P=30800$, $R=5$%, and $T=1$ in equation (1).
$CI=30800\left[\right(1+\frac{5}{100}{)}^1-1]$
$=30800\left[\right(\frac{105}{100})-1]$
$=30800\left(\frac{5}{100}\right)$
$=308\times 5$
$\therefore CI=1540$ Rs