Question

Calculate the Compound Interest

Mr. Shah lends ₹1,25,000 to Mr. Mehta for 3 years at the rate of 18% p.a. compounded annually.  Compute the amount payable by Mr. Mehta after 3 years.


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Answer 1

Question :-- Calculate the Compound Interest

Mr. Shah lends ₹1,25,000 to Mr. Mehta for 3 years at the rate of 18% p.a. compounded annually. Compute the amount payable by Mr. Mehta after 3 years.

Solution :--

Given :-

• Principal = 1,25,000
• Time = 3 years .
• Rate = 18% per annum.
• Amount = ?

we know, that, Amount , when rate is compounded Annually is given by :-

A = P(1+R/100)^T

Putting all values in formula we get,

→ A = 125000[ 1+(18/100)]³

→ A = 125000[1 + (9/50)]³

→ A = 125000[59/50]³

→ A = 125000 * (59/50) * (59/50) * (59/50)

→ A = 205379 .

Hence, Mr. Mehta will pay Rs.205379 after 3 years.