Question

The bank offers interest of at rate $7\%$ p.a compounded yearly. What interest will be received at the end of $5$ years if Rs.$10,000$ are deposited. Calculate by the method of compound interest.

• A. $4000$
• B. $4025.5$
• C. $4035$
• D. $3025$

Answer 1

Answer: (B)

$4025.5$

$P=10000,R=7,T=5$

$CI=P{[1+\frac{R}{100}]}^T-P$

$=10000{[1+\frac{7}{100}]}^5-10000$

$=10000[{\left(1.07\right)}^5-1]$

$=10000\times \mathrm{0.4025.5}$

$=4025.5$