Question

What is the compound interest on Rs.2,500 for, 3 years at 4% p.a. ?

Answer 1

Given :

Principle : ₹2500

Rate of interest : 4%

Time : 3 years

To find :

The compound interest of the given information.

Solution :

First, we should find the amount.

$\sf \dashrightarrow Amount = Principle \bigg( 1 + \dfrac{Rate}{100} \bigg)^{Time}$

$\sf \dashrightarrow 2500 \bigg( 1 + \dfrac{4}{100} \bigg)^{3}$

$\sf \dashrightarrow 2500 \bigg( \dfrac{100 + 4}{100} \bigg)^{3}$

$\sf \dashrightarrow 2500 \bigg( \dfrac{104}{100} \bigg)^{3}$

$\sf \dashrightarrow 2500 \bigg( \dfrac{26}{25} \bigg)^{3}$

$\sf \dashrightarrow 2500 \bigg( \dfrac{26^3}{25^3} \bigg)$

$\sf \dashrightarrow 2500 \bigg( \dfrac{17576}{15625} \bigg)$

$\sf \dashrightarrow 4 \bigg( \dfrac{17576}{25} \bigg)$

$\sf \dashrightarrow \dfrac{17576 \times 4}{25} = \dfrac{70304}{25}$

$\sf \dashrightarrow \cancel \dfrac{70304}{25}= 2812.16$

Now, we can find the compound interest.

Compound interest :

$\sf \dashrightarrow Amount - Principle$

$\sf \dashrightarrow 2812.16 - 2500$

$\sf \dashrightarrow Rs.2312.16$

Hence, the compound interest is ₹2312.16.