Question

Find the amount and compound interest on ₹ 5000 at 6% per annum, for 3 years, compounded annually.​

Answer 1

Given:

Principal = ₹ 5000

Compound rate of interest = 6% per annum

Time = 3 years

To find:

The amount after 3 years of compound interest.

Solution:

Formula for amount is:

`A=P\left(1+(r)/(100)\right)^t`

Where, P is principal, r is rate of interest in % and t is the number of years.

Putting P=5000, r=6 and t=3, we get

`A=5000\left(1+(6)/(100)\right)^3`

`A=5000\left(1+0.06\right)^3`

`A=5000\left(1.06\right)^3`

On further simplification, we get

`A=5000(1.018108216)`

`A=5000(1.191016)`

`A=5955.08`

Therefore, the amount after 3 years of compound interest is 5955.08.