Question

The compound interest on ₹ 10000 at 10% per annum for 3 years, compounded annually, is

(a) ₹ 1331 (b) ₹ 3310 (c) ₹ 3130 (d) ₹ 13310

Answer 1

(b) ₹ 3310

Explanation:

Present value= ₹ 10000

Interest rate= 10% per annum

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 = 10000 (1 + 10/100)³

⇒ A = 10000 (11/10)³

⇒ A = 121 (10) (11)

⇒ A = 1331 (10)

⇒ A = ₹ 13310

∴ Compound interest = A – P

= 13310 – 10000= ₹ 3310