Question

1.Find the compound interest on Rs25000 for 3 years at 10% per annum ,Compounded annually.

Plzz answer this question in step by step explanation.

Answer 1

The compound interest is Rs8275

Explanation:

The rule of the compound interest is A = P
`(1+(r)/(n))^(nr)`, where

• A is the new amount

• P is the initial amount

• r is the interest rate in decimal

• n is the number of periods

• t is the time

The interest I = A - P

∵ The amount of investment is Rs25000 for 3 years

∴ P = 25000

∴ t = 3

∵ The rate of interest is 10% per annum, compounded annually

∴ r = 10% = 10 ÷ 100 = 0.1

∴ n = 1 ⇒ compounded annually

→ Substitute these value in the 1st rule above to find the new amount

∵ A = 25000
`(1+(0.1)/(1))^(1(3))`

∴ A = 25000
`(1.1)^(3)`

∴ A = Rs33275

→ Use the 2nd rule above to find the interest

∵ I = 33275 - 25000

∴ I = 8275

∴ The compound interest is Rs8275