Question

The compound interest on Rs. $4000$ at $3\%$ per annum for $3\frac{1}{2}$ years, compounded annually, is

• A. $135.99$
• B. $235.99$
• C. $335.99$
• D. $435.99$

Answer 1

The correct option is D $435.99$

We know the formula,
$A=P{(1+\frac{r}{100})}^t$
Given:
$P=$ Rs. $4000,r=3\%$ and $t=3.5$ years
$\Rightarrow A=4000{(1+\frac{3}{100})}^{3.5}$
$\Rightarrow A=4000\times {1.03}^{3.5}$
$\Rightarrow A=4000\times 1.108997$
$\Rightarrow A=$ Rs. $4435.99$
To find interest, we use formula

$A=P+I$

Since $A=4435.99$ and $P=4000$,

we have $A=P+I$
$\Rightarrow 4435.99=4000+I$
$\Rightarrow I=4435.99-4000=435.99$
Interest, $I=$ Rs. $435.99$