Q2 of 74 Page 144

Find the amount and the compound interest on Rs. 15625 for 3 years at 12% per annum, compounded annually.

Present value = Rs.15625


Interest rate = 12% per annum


Time = 3 years


Amount (A) = P (1 + R/100)n [Where, P = Present value


R = Annual interest rate


n = Time in years]


∴ A = 15625 (1 + 12/100)3


⇒ A = 15625 (112/100)3


⇒ A = 15625 (28/25)3


⇒ A = 15625 × 21952/15625


⇒ A = 21952


∴ Amount = Rs.21952


∴ Compound interest = Rs.(21952 – 15625)


= Rs.6327


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