Question

Calculate the amount due in 3 years on Rs 5,000, if the rates of compound interest for successive years are 7%, 8% and 10% respectively.

Answer 1

Interest for 1st year = Rs $\frac{5000\times 7\times 1}{100}=Rs350$ and, amount at the end of 1st year = Rs 5000 + Rs 350 = Rs 5350 = Principal for 2nd year

Interest for 2nd year $=Rs\frac{5350\times 8\times 1}{100}=Rs\frac{42800}{100}=Rs428$ and amount at the end of 2nd year = Rs 5350 + Rs 428 = Rs 5778 = Principal for 3rd year

Interest for 3rd year $=Rs\frac{5778\times 10\times 1}{10}=Rs\frac{57780}{100}=Rs577.80$ and amount due at the end of 3rd year = Rs 5778 + Rs 577.80 = Rs 6.355.80.