Question

Find the compound interest on Rs. 10,800 for 3 years at $12\frac{1}{2}\%$ per annum, compounded annually.

Answer 1

Given that, $P=Rs.10,800,R=12\frac{1}{2}\%andT=3years$

To find out: Compound interest on the given principal amount after $3$ years, if compounded annually.

We know that, $CI=P[{(1+\frac{R}{100})}^T-1]$

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

$\therefore CI=10800[{(1+\frac{\frac{25}{2}}{100})}^3-1]$

$\Rightarrow CI=10800[{(1+\frac{25}{200})}^3-1]$

$\Rightarrow CI=10800[{\left(\frac{9}{8}\right)}^3-1]$

$\Rightarrow CI=10800[\frac{729}{512}-1]$

$\Rightarrow CI=10800\left[\frac{217}{512}\right]$

$\therefore CI=Rs.4577.34$

Hence, the compound interest on $Rs.10800$ for $3$ years at $12\frac{1}{2}\%$ is $Rs.4577.34$