Question

Calculate the amount and compound interest on (a) Rs 10800 for 3 years at 12 1/2% per annum compounded annually.

Answer 1

given, P = 10,800 Rs. T = 3 years and R = 12 1/2 % = 25/2 % per annum

use formula,

$A=P\left(1+\frac{R}{100}\right)^T$

or, $A=10800\left(1+\frac{\frac{25}{2}}{100}\right)^3$

or, $A=10800\left(1+\frac{25}{200}\right)^3$

or, $A=10800\left(1+\frac{1}{8}\right)^3$

or, $A=10800\left(\frac{9}{8}\right)^3$

or, A = 10800 × 9 × 9 × 9/(8 × 8 × 8)

= 15,377.3438 Rs.

now, compound interest = A - P

= 15,377.3438 - 10,800

= 4,577.3438 Rs.

Answer 2

given, P = 10,800 Rs. T = 3 years and R = 12 1/2 % = 25/2 % per annum

use formula,

A=P\left(1+\frac{R}{100}\right)^TA=P(1+100R)T

or, A=10800\left(1+\frac{\frac{25}{2}}{100}\right)^3A=10800(1+100225)3

or, A=10800\left(1+\frac{25}{200}\right)^3A=10800(1+20025)3

or, A=10800\left(1+\frac{1}{8}\right)^3A=10800(1+81)3

or, A=10800\left(\frac{9}{8}\right)^3A=10800(89)3

or, A = 10800 × 9 × 9 × 9/(8 × 8 × 8)

= 15,377.3438 Rs.

now, compound interest = A - P

= 15,377.3438 - 10,800

= 4,577.3438 Rs.