Given:
Present value= ₹ 10240
Interest rate= 12 ½ % per annum = 25/2%
Time=3 years
To find the amount we have the formula,
Amount (A) = P (1+(R/100))n
Where P is present value, r is rate of interest, n is time in years.
Now substituting the values in above formula we get,
∴ A = 10240 (1 + (25/2)/100)3
⇒ A = 10240 (1+1/8)3
⇒ A = 10240 (9/8)3
⇒ A = 31250 × 729/512 = 20 × 729
⇒ A = ₹ 14580
∴ Compound interest = A – P
= 14580 – 10240= ₹ 4340
