Question

Find the compound interest on Rs.$2,000$ at the rate of interest $5$% per annum for 3 years.

Answer 1

Given principal $P=$ Rs.$2000$, Rate $r=5$% yearly, Time $n=3$ years

We know that Compound Intererst $=$ Amount $-$ Principal

Also we know that Amount can be calculated using the formula :

$A=P{(1+\frac{r}{100})}^n$
Therefore,Compound interest $=P{(1+\frac{r}{100})}^n-P$
$=2000{(1+\frac{5}{100})}^3-2000$

$=2000{(1+\frac{1}{20})}^3-2000$

$=2000{\left(\frac{21}{20}\right)}^3-2000$

$=2000\times \frac{21}{20}\times \frac{21}{20}\times \frac{21}{20}-2000$

$=\frac{9261}{4}-2000$

$=2315.25-2000$

$=Rs.315.25$