Question

06 Calculate the compound interest and amount on 21,07,520 at 12.5% p.a for 3 years if the interest is Compounded annually -
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Answer 1

Given :

Principle : ₹2107520

Rate of interest : 12.5%

Time : 3 years

To find :

The amount and compound interest if the amount is compounded annually.

Solution :

First, we should find the value of the amount by it's formula.

$\sf \dashrightarrow Amount = Principle \bigg( 1 + \dfrac{Rate}{100} \bigg)^{Time}$

$\sf \dashrightarrow 2107520 \bigg( 1 + \dfrac{12.5}{100} \bigg)^{3}$

$\sf \dashrightarrow 2107520 \bigg( 1 + \dfrac{125}{1000} \bigg)^{3}$

$\sf \dashrightarrow 2107520 \bigg( 1 + \dfrac{1}{8} \bigg)^{3}$

$\sf \dashrightarrow 2107520 \bigg( \dfrac{8 + 1}{8} \bigg)^{3}$

$\sf \dashrightarrow 2107520 \bigg( \dfrac{9}{8} \bigg)^{3}$

$\sf \dashrightarrow 2108520 \bigg( \dfrac{9^3}{8^3} \bigg)$

$\sf \dashrightarrow 2108520 \bigg( \dfrac{729}{512} \bigg)$

$\sf \dashrightarrow 16465 \bigg( \dfrac{729}{4} \bigg)$

$\sf \dashrightarrow \dfrac{16465 \times 729}{4} = \dfrac{12002985}{4}$

$\sf \dashrightarrow \cancel \dfrac{12002985}{4} = 3000746.25$

Now, let's find the value of the compound interest by it's formula.

Compound interest :

$\sf \dashrightarrow Amount - Principle$

$\sf \dashrightarrow 3000746.25 - 2107520$

$\dashrightarrow$₹$\sf 893226.25$

Hence, the amount and compound interest are 3000746.25 and 893226.25 rupees respectively.