Question

A sum of Rs. 4500 is lent at compound interest. If the rate of interest is 10% per annum (interest is compounded annually), then what will be the amount after 3 years?

• A. Rs. 5989.5
• B. Rs. 5689.5
• C. Rs. 5686.5
• D. Rs. 5889.5

Answer 1

Answer:

A. Rs. 5989.5

Solution:

Given:

Amount of money lent = 4500

Rate of Interest = 10%

Number of Years = 3

Formula Used:

$A = P(1 + (\frac{r}{n}))^{nt}$

Where, A → Final amount

P → Initial Principal amount

r → Rate of Interest

n → number of times interest applied per time period

t → number of time period elapsed

Calculation:

$A = 4500\times{(1 + (\frac{10}{100}))}^{(1\times{3})}$

$⇒ A = 4500\times{(1.1)}^3$

⇒ A = Rs. 5989.5