Bhakti borrowed Rs 4000 from a women's saving group to buy a sewing machine. If the rate of compound interest is 5 p.c.p.a., what amount will she have to return at the end of 3 years?

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Solution

Principal =Rs 4,000
Rate of interest = 5% p.a.
Number of years (N) = 3 years
Amount = $P {(1 + \frac{R}{100})}^{N}$
$= 4000 {(1 + \frac{5}{100})}^{3} = 4000 {(1 + \frac{1}{20})}^{3} = 4000 {(\frac{21}{20})}^{3} = 4000 \times \frac{21}{20} \times \frac{21}{20} \times \frac{21}{20} = Rs 4630.50$

∴ The amount to be paid back by Bhakti is Rs 4630.50 .

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Bhakti borrowed Rs 4000 from a women's saving group to buy a sewing machine. If the rate of compound interest is 5 p.c.p.a., what amount will she have to return at the end of 3 years?

Principal =Rs 4,000 Rate of interest = 5% p.a. Number of years (N) = 3 years Amount = P1+R100N =40001+51003=40001+1203=400021203=4000×2120×2120×2120= Rs 4630.50 ∴ The amount to be paid back by Bhakti is Rs 4630.50 .