Question

Find the compound interest on Rs.25000 for 3 years at 6% per annum compounded annually .

Answer 1

Correct Question :-

A sum of ₹ 25000 was given as loan on compound interest for 3 years compounded annually at 5% per annum during the first year,6% per annum during the second year and 8% per annum during the third year. The compound interest is

Solution :-

Present value= ₹ 25000

Interest rate for first year, p= 5 % per annum

Interest rate for second year, q= 6 % per annum

Interest rate for second year, r= 8 % per annum

Amount (A) = P × (1+p/100) × (1+q/100) × (1+r/100)

Now substituting the values in above formula we get,

∴ A = 25000 × (1+5/100) × (1+6/100) × (1+8/100)

⇒ A = 25000 × (105/100) × (106/100) × (108/100)

⇒ A = 21 × 53 × 27

⇒ A = ₹ 30051

∴ Compound interest = A – P

= 30051 – 25000= ₹ 5051