Question

Find the amount when $Rs.10,800$ is invested for $3$ years at $12\frac{1}{2}\%$ per annum compounded annually.

Answer 1

Given,

Principal $P=Rs.10,800$

Rate of interest $R=12\frac{1}{2}\%=\frac{25}{2}\%$

Time $T=3$ years

So, $n=3$

Amount $A=P{(1+\frac{R}{100})}^n$

$=Rs.10,800\times {(1+\frac{25}{2\times 100})}^3$

$=Rs.10,800\times {(1+\frac{1}{8})}^3$

$=Rs.10,800\times {\left(\frac{9}{8}\right)}^3$

$=Rs.10,800\times \frac{9}{8}\times \frac{9}{8}\times \frac{9}{8}$

$=Rs.15,377.34$

Hence, the amount after $3$ years will be $Rs.15,377.34$.