Question

Calculate the compound interest on Rs. $16,000$ in $3$ years, when the rates of the interest for successive years are $10$%, $14$% and $15$% respectively.

Answer 1

For the first year, on interest being compounded at $R=10$ %, we have
$Amount=P{(1+\frac{R}{100})}^N=16,000\times {(1+\frac{10}{100})}^1=16,000\times 1.1=Rs17,600$

For the second year, $P=Rs17,600$ on interest being compounded at $R=14$ %, we have
$Amount=P{(1+\frac{R}{100})}^N=Rs17,600\times {(1+\frac{14}{100})}^1=Rs17,600\times 1.14=Rs20,064$

For the third year, $P=Rs20,064$ on interest being compounded at $R=15$ %, we have
$Amount=P{(1+\frac{R}{100})}^N=Rs20,064\times {(1+\frac{15}{100})}^1=Rs20,064\times 1.15=Rs23,073.60$

So, Total amount $=Rs23,073.60$

And $TotalC.I.=A-P=Rs23,073.60-Rs16,000=Rs7,073.60$