Question

Calculate the compound interest and amount on Rs $10,800$ for $3$ years at $12\frac{1}{2}\%$ per annum compounded annually.

Answer 1

Step:Calculate the compound interest and amount.

Given parameters

• Principal (P) = Rs $10,800$
• Time $n$ $=$ $3$ years
• Rate of interest (R) $=12\frac{1}{2}\%$

$$\begin{gathered} A=P{\left(1+\frac{R}{100}\right)}^n \\ A=10800{\left(1+\frac{25}{2\times 100}\right)}^3 \\ A=10800{\left(1+\frac{1}{8}\right)}^3 \\ A=10800\times {\left(\frac{9}{8}\right)}^3 \\ A=10800\times \frac{9}{8}\times \frac{9}{8}\times \frac{9}{8} \\ A=15377.34 \end{gathered}$$

$\mathit{A}\mathbf{=}\mathbf{₹}\mathbf{15377}\mathbf{.}\mathbf{34}$

$\left(A\right)=₹15377.34$

Compound Interest (C.I) $=A-P$

$$\begin{gathered} C.I=10800-15377.34 \\ C.I=₹4577.34 \end{gathered}$$

Hence, the required value is $₹4577.34$.