1. A sum of 7000 is borrowed for 3 years on compound interest. The rates of interest
for the 3 years are 7%, 8% and 9% respectively. Find the amount that has to be repaid
after 3 years.
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Answer:
Principal =7000, R =4%, n =2 (semiannually compounded),
t =3 years
Using the formula, we have
A=P(1+
100
R
)
n.t
⇒A=7000(1+
100
4
)
2×3
⇒A =7000×(1.04)
6
⇒A =7000×1.26531902
Amount =8857.23
Compound interest = Amount − Principal
=8857.23−7000
Compound interest =1857.23
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