A sum of rupees 25000 was given as loan on compound interest for 3 years compounded annually at 5% per annum during 1st year, 6% during second year, and 8% during third year. The compound interest is?
Answers
Answer:
Step-by-step explanation:
Interest on first year:(25000×5×12)/(100×12)=1250
Next year principal=25000-1250=23750
Interest on second year:(23750×6×12)/(100×12)=1425
Next year principal=23750-1425=22325
Interest on third year:(22325×8×12)/(100×12)=1786
Next year principal=22325-1786=20539
The compound Interest=1250+1425+1786=4461 (Ans)
Present value= ₹ 25000
Interest rate for first year, p = 5 % per annum
Interest rate for second year, q = 6 % per annum
Interest rate for second year, r = 8 % per annum
Amount (A) = P × (1+p/100) × (1+q/100) × (1+r/100)
Now substituting the values in above formula we get,
∴ A = 25000 × (1+5/100) × (1+6/100) × (1+8/100)
⇒ A = 25000 × (105/100) × (106/100) × (108/100)
⇒ A = 21 × 53 × 27
⇒ A = ₹ 30051
∴ Compound interest = A – P
= 30051 – 25000= ₹ 5051