Question

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

Answer 1

For the first year
$P=Rs.30,800$
$N=1year$
$R=5$ %
We have $S.I.=\frac{PNR}{100}=\frac{30,800\times 1\times 5}{100}=Rs.1,540$
And Amount at the end of first year $P+S.I.=Rs.30,800+Rs.1,540=Rs.32,340$
Now, for the second year
$P=Rs.32,340$
$N=1year$
$R=5$ %
We have $S.I.=\frac{PNR}{100}=\frac{32,340\times 1\times 5}{100}=Rs.1617$
And Amount at the end of second year $P+S.I.=Rs.32,340+Rs.1617=Rs.33,957$
Also, for the third year
$P=Rs.33,957$
$N=1year$
$R=5$ %
We have $S.I.=\frac{PNR}{100}=\frac{33,957\times 1\times 5}{100}=Rs.1697.85$