Question

Compound interest Rs 8000 for 3 years at 5% for the first year and 10% for the second year and 15% for the third year will be 

1. 1313
2. 4000
3. 2626
4. 5000
5. None of these

Answer 1

Correct Answer - Option 3 : 2626

Given: Principal amount (P) = 8000

Interest rate for first year = 5%

Interest rate for second year = 10%

Interest rate for third year = 15%

Formula used: Principal amount [{1 + (Rate of First year/100)} {1 + (Rate of second year/100)} {1 + (Rate of third year/100)}] - Principal

Calculation: Compound interest = 8000 [{1 + (5/100)} {1 + (10/100)} {1 + (15/100)}] - 8000

⇒ 8000 {(21/20) (11/10) (23/20) – 1}

⇒ 8000 {(5313/4000) – 1}

⇒ 8000 {(5313 – 4000)/4000}

⇒ (8000 × 1313)/4000

⇒ 2 × 1313

∴ 2626