Question

Customer deposited $ 1250 in his savings bank account. Find the Compound Interest (C.I.) earned by him after 3 years at the rate of 5% per annum.​

Answer 1

Given :

Principle : $1250

Rate of interest : 5%

Time : 3 years

To find :

The compound interest.

Solution :

First, we'll find the amount.

$\sf \dashrightarrow Amount = Principle \bigg( 1 + \dfrac{Rate}{100} \bigg)^{Time}$

$\sf \dashrightarrow 1250 \bigg( 1 + \dfrac{5}{100} \bigg)^{3}$

$\sf \dashrightarrow 1250 \bigg( 1 + \dfrac{1}{20} \bigg)^{3}$

$\sf \dashrightarrow 1250 \bigg( \dfrac{20 + 1}{20} \bigg)^{3}$

$\sf \dashrightarrow 1250 \bigg( \dfrac{21}{20} \bigg)^{3}$

$\sf \dashrightarrow 1250 \bigg( \dfrac{21^3}{20^3} \bigg)$

$\sf \dashrightarrow 1250 \bigg( \dfrac{9261}{8000}\bigg)$

$\sf \dashrightarrow 5 \bigg( \dfrac{9261}{32}\bigg)$

$\sf \dashrightarrow \dfrac{9261 \times 5}{32} = \dfrac{46305}{32}$

$\sf \dashrightarrow \cancel \dfrac{46305}{32} = 1447.03125$

Now, we can find the compound interest.

Compound interest :

$\sf \dashrightarrow Amount - Principle$

$\sf \dashrightarrow 1447.03125 - 1250$

$\dashrightarrow$₹$\sf 197.03125$

Hence, the compound interest is ₹197.03125.