# If the principal of Rs. 8000 at the rate of 5% per annum. Compounded annually for 3 years. Find the compound interest.

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If the principal of Rs. 8000 at the rate of 5% per annum. Compounded annually for 3 years. Find the compound interest.
1. Rs. 3310
2. Rs. 8000
3. Rs. 9261
4. Rs. 1261

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Correct Answer - Option 4 : Rs. 1261

Given:

Principal = Rs. 8000

Rate = 5%

Time = 3 years.

Formula used:

C.I = P[(1 + R/100)N – 1]

Calculation:

C.I = P[(1 + R/100)N – 1]

⇒ C.I = 8000[(1 + 5/100)3 – 1]

⇒ C.I = 8000 × [(21/20)3  – 1]

⇒ C.I = 8000 × [(9261 – 8000)/8000]

⇒ C.I = (8000 × 1261/8000)

⇒ C.I = Rs. 1261

∴  The compound interest is  Rs. 1261