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Calculate the Amount and Cornpound Interest for the Following, When Cornpounded Annually:

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Question

Calculate the amount and cornpound interest for the following, when cornpounded annually: 

Rs 25,000 for 3 years at 8 % p.a. 

Sum
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Solution

Rs 25,000 for 3 years at 8 % p.a. 

P=Rs 25,000; t=3 years; r=8 % p.a.

`"A" = "P" (1 + "r"/100)^"n"`

A = Rs 25000 `(1 + 8/100)^3`

= Rs 25, 000 x 1. 08 x 1.08 x 1. 08

= Rs 31,492.80 

C.l .= A - P

= Rs (31,492.80 - 25, 000)

= Rs 6,492.80 

Hence, Amount = Rs 31,492.80 and C.I. = Rs 6,492.80 

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Concept of Compound Interest - Compound Interest as a Repeated Simple Interest Computation with a Growing Principal
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