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
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