Question

31250 for 3 years at 8% per annum compounded anually

Answer 1

#BAL

Present value = Rs.31250

Interest rate = 8% per annum

Time = 3 years

Amount (A) = P (1 + R/100)n [Where, P = Present value

R = Annual interest rate

n = Time in years]

∴ A = 31250 (1 + 8/100)3

⇒ A = 31250 (1 + 2/25)3

⇒ A = 31250 (27/25)3

⇒ A = 31250 × 27/25 × 27/25 × 27/25

⇒ A = 31250 × 19683/15625

⇒ A = 2 × 19683

⇒ A = 39366

∴ Amount = Rs.39366

∴ Compound interest = Rs.(39366 – 31250)

= Rs.8116