Question

Surabhi borrowed a sum of Rs 12000 from a finance company to purchase a refrigerator. If the rate of interest is 5% per annum compounded annually, calculate the compound interest that Surabhi has to pay to the company after 3 years.

Answer 1

$$\begin{gathered} \mathrm{A}=\mathrm{P}{\left(1+\frac{\mathrm{R}}{100}\right)}^{\mathrm{n}} \\ =12,000{\left(1+\frac{5}{100}\right)}^3 \\ =12,000{\left(1.05\right)}^3 \\ =13,891.50 \\ \mathrm{Thus},\mathrm{the}\mathrm{required}\mathrm{amount}\mathrm{is}\mathrm{Rs}13,891.50. \\ \mathrm{Now}, \\ \mathrm{CI}=\mathrm{A}-\mathrm{P} \\ =\mathrm{Rs}13,891.50-\mathrm{Rs}12,000 \\ =\mathrm{Rs}1,891.50 \end{gathered}$$