How much amount is to be repaid if Rs.40,000 is borrowed for 3 years at the rate of 5% per annum compounded anually?
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method of computation of interest in banks = compound interest
Principal amount (p) = 40000
rate of interest = i = 5%
time = n = 3years
compounded amount = P(1+i)^n
= 40000(1 + 5/100)^3
= 40000(1 + 0.05 )^3
= 40000(1.05)^3
=40000(1.157625)
=46305(Approx)
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