Find compound interest on Rs 12,000 for 3 years , the rate of interest being 10% for the first years , 12% for the second year and 14%for the third year
Answers
Solution!!
For 1st year
Principal (P) = Rs 12000
Time (T) = 1 year
Rate of interest (R) = 10%
Interest = (P × R × T)/100
Interest = (12000 × 10 × 1)/100
Interest = 120 × 10 × 1
Interest = Rs 1200
Amount = Principal + Interest
Amount = Rs 12000 + Rs 1200
Amount = Rs 13200
For 2nd year
The amount in the first year will be the principal in the second year.
Principal (P) = Rs 13200
Time (T) = 1 year
Rate of interest (R) = 12%
Interest = (P × R × T)/100
Interest = (13200 × 12 × 1)/100
Interest = 132 × 12 × 1
Interest = Rs 1584
Amount = Principal + Interest
Amount = Rs 13200 + Rs 1584
Amount = Rs 14784
For 3rd year
The amount in the second year will be the principal in the third year.
Principal (P) = Rs 14784
Time (T) = 1 year
Rate of interest (R) = 14%
Interest = (P × R × T)/100
Interest = (14784 × 14 × 1)/100
Interest = 206976/100
Interest = Rs 2069.76
Amount = Principal + Interest
Amount = Rs 14784 + Rs 2069.76
Amount = Rs 16853.76
On adding the interest of all the three years, we will get the compound interest.
CI = Rs 1200 + Rs 1584 + Rs 2069.76
CI = Rs 4853.76
Hence, the compound interest is Rs 4853.76