Question

Calculate the amount and compound interest for Rs. 20,000 for 3 years at 8% compounded annually.

Answer 1

Here $P=20,000$ Rs., $n=3$ years, $R=8$

Amount$\left(A\right)=P{(1+\frac{R}{100})}^n$

$=20000{(1+\frac{8}{100})}^3$

$=20000{\left(\frac{27}{25}\right)}^3$

$=\frac{20000\times (27{)}^3}{25\times 25\times 25}$

$=\frac{32\times (27{)}^3}{25}$

$=25,194.24$ Rs.

Compound interest$(C.I)=A-P=25,194.24-20,000=5,194.24$

Hence, the compound interest is Rs. $5,194$