Question

Anil borrowed a sum of Rs 9600 to install a handpump in his dairy. If the rate of interest is $5\frac{1}{2}\%$ per annum compounded annually, determine the compound interest which Anil will have to pay after 3 years.

Answer 1

$$\begin{gathered} \mathrm{A}=\mathrm{P}{\left(1+\frac{\mathrm{R}}{100}\right)}^{\mathrm{n}} \\ =9,600{\left(1+\frac{5.5}{100}\right)}^3 \\ =9,600{\left(1.055\right)}^3 \\ =\mathrm{Rs}11,272.72 \\ \mathrm{Now}, \\ \mathrm{CI}=\mathrm{A}-\mathrm{P} \\ =\mathrm{Rs}11,272.72-\mathrm{Rs}9,600 \\ =\mathrm{Rs}1,672.72 \end{gathered}$$