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Question

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


  1. Rs 6,000

  2. Rs 6,620

  3. Rs 26,620

  4. Rs 26,000


Solution

The correct option is B

Rs 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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