Question

Calculate the compound interest accrued on Rs. 6,000 in 3 years, compounded yearly, if the rates for the successive years are 5%, 8% and 10% respectively.

Answer 1

Given : P = Rs. 6,000; n = 3 years; r₁ = 5%; r₂ = 8% and r₃ = 10%

Amount = `"P"( 1 + r_1/100)( 1 + r_2/100)( 1 + r_3/100)`

               = `6000( 1 + 5/100 )( 1 + 8/100)( 1 + 10/100)`

               = `6000(21/20)(27/25)(11/10)`

               = Rs. 7,484.40
∴ C.I. = Rs. 7,484.40 - Rs. 6,000 = Rs. 1,484.40.