Question

Find compound interest, p=1400, r=5%, n(time) 1=3years

Answer 1

Solution!!

The concept of compound interest has to be used here. The principal, rate of interest and time is given in the question. We are asked to find the compound interest. So, first we will calculate the amount and then we will use a formula to calculate the compound interest.

Principal = Rs 1400

Time = 3 years

Rate of interest = 5%

Amount = P(1 + R/100)ⁿ

Amount = 1400(1 + 5/100)³

Amount = 1400(105/100)³

Amount = 1400(21/20)³

Amount = 1400 × (21/20) × (21/20) × (21/20)

Amount = 1400 × 9261/8000

Amount = 7 × 9261/40

Amount = 64827/40

Amount = Rs 1620.675

CI = Amount - Principal

CI = Rs 1620.675 - Rs 1400

CI = Rs 220.675

Abbreviations used:-

Principal → P

Rate of interest → R

Time → n

Compound interest → CI