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 + (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 × (1 + (10/100))1 × 3 ⇒ A = 4500 × (1.1)3 ⇒ A = Rs. 5989.5