Mr. Raja has invested rs 7000 in a bank that offers him 7% compound (yearly) rate of interest. What would be his expected return after 3 years
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the answer is about ₹ 8,575
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Given - Principal, rate of interest and time.
Find - Amount
Solution - Expected amount after 3 years is Rupees 8400
The formula to be used for calculating compound interest is = Amount = Principal (1 + rate of interest/100)^time period.
Principal = Rupees 7000
Rate of interest = 7%
Time period = 3 years
Amount = 7000 (1+(7/100))^(3)
Amount = 7000 (107/100)³
Amount = 7000 (1.07)³
Amount = 7000*1.2
Amount = Rupees 8400
Thus, the expected amount after 3 years is Rupees 8400
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