sant ram borrowed a sum of rupees 2000 from the co-operative bank to install a handpump in his diary.if the rate of intrest is 5% per annum ,calculate the compound interest that Sant ram will pay to the bank after 3 years
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Step-by-step explanation:
Principle=2000
Rate=5%p.a.
Term=3Years
Interest for first year
P=2000
R=5%p.a.
T=1 year
SI=(P*R*T)/100
=(2000*5*1)/100
=100
A=P+SI
=2000+100
=2100
Interest for second year
P=2100
R=5%p.a.
T=1 year
SI=(P*R*T)/100
=(2100*5*1)/100
=105
A=P+SI
=2100+105
=2205
Interest for third year
P=2205
R=5%p.a.
T=1 year
SI=(P*R*T)/100
=(2205*5*1)/100
=110.25
Compound Interest
CI=SI for first year+SI for second year + SI for third year
=100+105+110.25
=315.25
ANS :- The compound interest is 315.25
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