Question

The compound interest on ₹ 10000 at 12% per annum for 1 ½ years, compounded annually, is

(a) ₹ 1872 (b) ₹ 1720 (c) ₹ 1910.16 (d) ₹ 1782

Answer 1

(a) ₹ 1872

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 + 12/100)¹ [1 + (12/2 )/100]

⇒ A = 10000 (1+12/100)¹(1+6/100)

⇒ A = 10000 (112/100) (106/100)

⇒ A = 1 × 112 × 106

⇒ A = ₹ 11872

∴ Compound interest = A – P

= 11872 – 10000= ₹ 1872