Question

Find the compound interest on Rs. 1000 at the rate of 10% per annum for 3 years.

Answer 1

$P=$ Rs. $1000$,

$R=10\%$, p.a.

$T=3$ years

Interest for the $1$st year

$=\frac{P\times R\times T}{100}=\frac{1000\times 1\times 10}{100}=Rs.100$

Amount after the $1$st year $=$ Principal for the $2$nd year $=1000+100=Rs.1100$

Interest after $2$nd year $=\frac{1100\times 1\times 10}{100}=Rs.110$

Amount after the $2$nd year =Principal ( for the $3$rd year) $=1100+110=Rs.1210$

Interest for the $3$rd year $=\frac{1210\times 1\times 10}{100}=Rs.121$

Amount after the $3$rd year $=1210+121=Rs.1331$

Compound interest for three years $=Amount$ (after $3$ years) - (initial)$Principal$

$=Rs.1331-Rs.1000=Rs.331$