Question

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

• A. Rs 6,620
• B. Rs 6,000
• C. Rs 26,620
• D. Rs 26,000

Answer 1

The correct option is A

Rs 6,620

$A=P\times [1+\frac{r}{100}{]}^n$, 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

$A=20,000\times [1+\frac{10}{100}{]}^3$
$A=20,000\times \left[\frac{11\times 11\times 11}{10\times 10\times 10}\right]$
A = ₹ 26,620

So, C.I = 26,620 - 20,000 = ₹ 6,620