Question

Tick (✓) the correct answer:
The compound interest on Rs 10000 at 10% per annum for 3 years, compounded annually, is
(a) Rs 1331
(b) Rs 3310
(c) Rs 3130
(d) Rs 13310

Answer 1

(b) Rs. 3310

$$\begin{gathered} A=P\times {\left(1+\frac{R}{100}\right)}^n \\ =\mathrm{Rs}.10000\times {\left(1+\frac{10}{100}\right)}^3 \\ =\mathrm{Rs}.10000\times {\left(\frac{110}{100}\right)}^3 \\ =\mathrm{Rs}.10000\times {\left(\frac{11}{10}\right)}^3 \\ =\mathrm{Rs}.10000\times \left(\frac{11}{10}\right)\times \left(\frac{11}{10}\right)\times \left(\frac{11}{10}\right) \\ =\mathrm{Rs}.\left(10\times 11\times 11\times 11\right) \\ =\mathrm{Rs}.13310 \\ \therefore \mathrm{Compound}\mathrm{interest}=\mathrm{amount}-\mathrm{principal}=\mathrm{Rs}(13310-10000)=\mathrm{Rs}3310 \end{gathered}$$