Question

Rahman lent Rs. 16000 to Rasheed at the rate of $12\frac{1}{2}\%$ per annum compound interest. Find the amount payable by Rasheed to Rahman after 3 years.

Answer 1

Principal (P) = Rs. 1600
Rate (R) $=12\frac{1}{2}\%=\frac{25}{2}\%$ p.a.
Time (n) = 3 years
$\therefore$ Amount (A) $=P{(1+\frac{R}{100})}^n$
$=Rs.16000{(1+\frac{25}{2\times 100})}^3$
$=Rs.16000{\left(\frac{9}{8}\right)}^3$
$=Rs.16000\times \frac{9}{8}\times \frac{9}{8}\times \frac{9}{8}=Rs.22781.25$