Question

Calculate the amount and the compound interest on Rs. 10,000 in 3 years at 8% per annum.

Answer 1

For 1st year

Principal (P) = Rs.10,000, Rate (R) = 8%

Time (T) = 1 year

∴ Interest =`(10,000xx8xx1)/100`

= 100 × 8 

= Rs.800

For 2nd year

P = Rs.10,000 + Rs.800 = Rs.10,800

Rate (R) = 8%, Time (T) = 1 year

∴ Interest =`(10,800xx8xx1)/100`

= 108 × 8

= Rs.864

For 3rd year

∴ P = Rs.10,800 + Rs.864 = Rs.11664,

R = 8%, T = 1 year

∴ Interest =`(11664xx8xx1)/100=(11664xx2)/25`

= Rs.933.12

∴ Amount = Rs.11664+ 933.12 = Rs.12597.12

Hence required amount = Rs.12597.12

∴ Compound interest = Rs.12597.12 − 10000

= Rs.2597.12