Question

What is the compound interest on Rs 6, 250 at 4% p. a compoundded annually for 3 years ?

• A. Rs. 780.00
• B. Rs. 789.00
• C. Rs. 788.80
• D. 780.4

Answer 1

The correct option is D 780.4

$$\begin{array}{c}A=P{\left(1+\frac{r}{100}\right)}^n\\ A=6250{\left(1+\frac{4}{100}\right)}^3\\ A=6250{\left(\frac{104}{100}\right)}^3\\ A=6250{\left(1.04\right)}^3\\ A=7030.40\end{array}$$

Hence,

Compound Interest $=$ $7030.40-6250$

$=Rs.780.40$