Question

A sum of ₹14000 is lent at compound interest (interest is compounded annually) for 3 years. If the rate of interest is 10%, then what will be the compound interest?

• A. ₹3,780
• B. ₹4,645
• C. ₹5,285
• D. ₹4,300

Answer 1

Answer:

A. ₹3,780

Solution:

Given:

Principal amount, P = 14000

Number of years, N = 3

Rate of interest, R = 10%

Formula used:

Total amount, $A = P\times{(1 + (\frac{R}{100}))}^N$

C.I = Total amount – Principal amount

Calculation:

Total amount, $A = 14000\times{(1 + (\frac{10}{100}))^3}$

⇒ A = 18634

∴ C.I = 18634 – 14000 = 4634