Question

A person invests an amount of Rs 4500 for three years at the rate of 20% per annum. What approximate amount of compound interest will he obtain at the end of three years?

Select one:
a. Rs 3484
b. Rs 3276
c. Rs 3612
d. Rs 3048
e. Rs 3760

Answer 1

The approximate amount of compound interest that he will obtain at the end of three years is (b.) Rs 3276.

Explanation:

Given -
P (principal) = Rs 4500
t (time) = 3 years
r (interest rate) = 20%

Formula:

A =
`\begin{array}{l}P\left (1+(R)/(100) \right )^(t)\end{array}`

after putting values

A =
`\begin{array}{l}4500\left (1+(20)/(100) \right )^(3)\end{array}`

after calculation-

A = 7776

now this, A contains the Principal (P) + Interest (I)

Known

A = P + I

so

I = A - P

Putting actual values -

I = 7776 - 4500

I = 3276