Question

By using the formula, find the amount and compound interest on:

Rs 10240 for 3 years at $12\frac{1}{2}\%$ per annum compounded annually.

Answer 1

$\text{Principal (P) = Rs. 10240}\text{Rate (R)}=12\frac{1}{2}\%=\frac{25}{2}\%p.a.\text{Period (n) = 3 years}\therefore \text{Amount (A)}=P{(1+\frac{R}{100})}^n=Rs.10240{(1+\frac{25}{2\times 100})}^3=Rs.10240\times {\left(\frac{9}{8}\right)}^3=Rs.10240\times \frac{9}{8}\times \frac{9}{8}\times \frac{9}{8}=Rs.14580\therefore \text{C.I. = A - P = Rs. 14580 - Rs. 10240}=Rs.4340$