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Question

Find the compound interest on 20,000 for 3 years at 10% per annum compounded annually.


A

6,620

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B

6,000

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C

26,620

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D

₹26,000​

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Solution

The correct option is A

6,620


A=P×[1+r100]n, where P is the principal, r is the rate of interest and n is the time period.
C.I = A - P

Here, P = 20,000, r = 10 %, and n = 3 years

A=20,000×[1+10100]3
A=20,000×[11×11×1110×10×10]
A =
26,620

So, C.I = 26,620 - 20,000 = 6,620


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