Question

Swati took a loan of Rs 16000 against her insurance policy at the rate of $12\frac{1}{2}\%$ per annum. Calculate the total compound interest payable by Swati after 3 years.

Answer 1

$$\begin{gathered} \mathrm{Given}: \\ \mathrm{P}=\mathrm{Rs}16,000 \\ \mathrm{R}=12.5\%\mathrm{p}.\mathrm{a}. \\ \mathrm{n}=3\mathrm{years} \\ \mathrm{We}\mathrm{know}\mathrm{that}: \\ \mathrm{A}=\mathrm{P}{\left(1+\frac{\mathrm{R}}{100}\right)}^{\mathrm{n}} \\ =16,000{\left(1+\frac{12.5}{100}\right)}^3 \\ =16,000{\left(1.125\right)}^3 \\ =\mathrm{Rs}22,781.25 \\ \mathrm{Now}, \\ \mathrm{CI}=\mathrm{A}-\mathrm{P} \\ =\mathrm{Rs}22,781.25-\mathrm{Rs}16,000 \\ =\mathrm{Rs}6,781.25 \end{gathered}$$