Question

Calculate the compound interest on a sum of Rs. $20000$ at the end of $3$ years at the rate of $10\%$ p.a. compounded annually.

• A. $6620$
• B. $5620$
• C. $3410$
• D. $2386$

Answer 1

The correct option is A $6620$

Given, $P=20000,r=10\%,n=3$ years
$A=P\left[{(1+\frac{r}{100})}^n\right]$
$A=20000\left[{(1+\frac{10}{100})}^3\right]$

$A=20000\times \frac{11}{10}\times \frac{11}{10}\times \frac{11}{10}$
$A=\text{Rs.}26620$
Compound interest $=$ Amount $-$ Principal
$C.I.=26620-20000$

$C.I.=\text{Rs.}6620$