Monica borrowed a sum of $R s . 12, 500$ to open a store, at the rate of $5.5 %$ per annum for $3$ years. Find the compound interest paid by her after $3 y e a r s$ .

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Solution

Interest for the $1^{s t}$ year $= R s \frac{12500 \times 5.5 \times 1}{100} = R s 687.50$
Amount after the $1^{s t}$ year $= R s 12500 + R s 687.50 = R s 13187.50$
Interest for the $2^{n d}$ year $= R s \frac{13187.50 \times 5.5 \times 1}{100} = R s 725.3125$
Amount after the $2^{n d}$ year $= R s 13187.50 + R s 725.3125 = R s 13912.8125$
Interest for the $3^{r d}$ year $= R s \frac{13912.8125 \times 5.5 \times 1}{100} = R s 765.20$
Amount after the $3^{r d}$ year $= R s 13912.8125 + R s 765.20 = R s 14678$
$∴$ Compound Interest $= R s 14678 - R s 12500 = R s 2178$

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Monica borrowed a sum of Rs.12,500 to open a store, at the rate of 5.5% per annum for3years. Find the compound interest paid by her after 3years.

Monica borrowed a sum of $R s . 12, 500$ to open a store, at the rate of $5.5 %$ per annum for $3$ years. Find the compound interest paid by her after $3 y e a r s$ .