Question

21. What is the present worth of 20000 due after
three years at 10% p.a. compound interest? (Given
(1/1.1) = 0.90)
(A) 13970
(B) 14120
(C) 14580
(D) 15730

Answer 1

Given:-

•Principal = 20000rupees

•Rate=10%

•Time=3 years

To Find:-

•Amount=?

•Compound Interest=?

Solution:-

we have,

• Principal=20000rupees
• Rate=10%
• Time=3years

Using Formula:

$\: \: \sf \: amount = p {(1 + \frac{r}{100}) }^{n}$

Now substitute the values,

$\: \: \sf \: amount = 20000 {(1 + \frac{10}{100} ) }^{3} \\ \\ \: \: \sf \: amount = 20000 \times \frac{11}{10} \times \frac{11}{10} \times \frac{11}{10} \\ \\ \: \: \sf \: amount = 26620 \: rupees$

Hence,Amount is 26620rupees.

Now find Compound Interest

Using Formula:

$\: \: \sf \: compound \: interest = amount - principal$

Now substitute the values,

$\: \: \sf \: compound \: interest = 26620 - 20000 \\ \\ \: \: \sf= 6620rupees$

Hence,Compound Interest is 6620rupees.

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