. Find the amount and the compound interest on 24500 for 3 years, compounded annually, rate of interest being
5%, 8% and 10% per annum for the first, second and third year respectively.
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The amount at the end of the first year
A
1
=P(1+
100
R
)
=18.750(1+
100
8
)
=18.750⋅
25
27
=750×27
=Rs. 20,250
Interest I
1
=A
1
−P
First year =(20,250−16,750)
=Rs. 1,500
Amount for second year
A
2
=P(1+
100
R
1
)(1+
100
R
2
)
=18,750(1+
100
8
)(1+
100
10
)
=18,750⋅
25
27
⋅
10
11
=Rs. 22,275.
Interest for second year
=A
2
−A
1
=22,275−20,250
=Rs. 2,025
Amount for third year
A
3
=P(1+
100
R
1
)(1+
100
R
2
)(1+
100
R
3
)
=18,750(1+
100
8
)(1+
100
10
)(1+
100
12
)
=18,750×
25
27
×
10
11
×
25
28
=Rs. 24,948.
Interest for third year =A
3
−A
2
=24,948−22,275
=Rs. 2,673.
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