Question

Calculate the amount and compound interest on (a) rupees 10,800 for 3 years at 12 ½% per annum compound annually

Answer 1

The compound interest accumulation formula is :

P (1 + i)ⁿ = A

A = Accumulated amount

P = principle amount otherwise the deposited amount.

i = effective rate of interest

n = Time in years

Calculations

1.) Amount

10800 × (1.125)³ = 15377.34

2.) Compound interest

Interest = Accumulated amount - principle

Interest = 15377.34 - 10800 = 4577.34

Rs 4577.34

Answer 2

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Refer the attachment.