Question

what is the compound interest on a principal Rs25000/- after 3 years at the rate of 12 %​

Answer 1

Compound Interest is Rs 10,123.2

Step-by-step explanation:

We have to determine the compound interest on a principal of Rs 25,000 after 3 years at the rate of 12 %​.

Let P = Principal sum of money

     R = Rate of interest

     T = Time period

     A = Amount of money

As we know that the formula for calculating amount in case of compound interest is given by;

                       $\text{Amount}=\text{Principal} \times (1+\text{Rate of interest})^{\text{Time}}$

                                                Or

                                  $A=P\times (1+R)^{T}$

Now, in the question we are provided with P = Rs 25,000 , R = 12% and Time period, T = 3 years.

So,            Amount  =  $25,000\times (1+\frac{12}{100} )^{3}$

                                =  $25,000\times (1+0.12 )^{3}$

                                =  $25,000\times (1.12)^{3}$

                                =  Rs 35,123.2

Hence, amount of money after 3 years is Rs 35,123.2.

Now, Compound Interest is given by;

             Amount  =  Principal + Compound Interest

        Rs 35,123.2  =  Rs 25,000 + Compound Interest

So, Compound interest  =  Rs 35,123.2 - Rs 25,000

                                        =  Rs 10,123.2

Therefore, the compound interest on a principal Rs 25,000 after 3 years at the rate of 12 %​ is Rs 10,123.2.

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