What will be the compound interest on a sum of Rs 25,000 after 3 years at the rate of 12% per annum?
1. Rs 9000.30
2. Rs 9720
3. Rs 10123.20
4. Rs 10483.20
1. Rs 9000.30
2. Rs 9720
3. Rs 10123.20
4. Rs 10483.20
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Correct Answer – Option 3 : Rs 10123.20
Given:
Principal P = Rs. 25000
Time n = 3 years
Rate r = 12% per annum
Formula used:
Compound interest = Principal × [1 + r/100]n – Principal
Calculation:
Compound interest = 25000 × [1 + 12/100]3 – 25000
⇒ 25000 × [28/25 × 28/25 × 28/25] – 25000
⇒ (8/5) × 28 × 28 × 28 – 25000
⇒ 35123.20 – 25000 = 10,123.20
∴ The compound interest = Rs. 10,123.20