Question

Calculate the compound interest (to the nearest integer, in $Rs$.) on $Rs10,800$ for $3$ years at $12\frac{1}{2}\%$ per annum compounded annually.

Answer 1

$A=P{(1+\frac{R}{100})}^t$
P$=10800$, R$=12\frac{1}{2}$, t$=3$
So,
$A=10800{(1+\frac{\frac{25}{2}}{100})}^3$
$=10800{(1+\frac{25}{200})}^3$
$=10800{(1+\frac{1}{8})}^3$
$=10800{\left(\frac{9}{8}\right)}^3$
$=15377.34$
Amount $=$Rs. $15,377.34$
Compound Interest $=$Rs. $(15,377.34-10800)$
$=$Rs. 4,577.34

Nearest integer to $4577.34$ is $4577$.

Hence, CI will be Rs $4577$.