Question

Find the compound interest on ₹8,000 at 12% per annum for 3 years 4 months, compounded annually.

• A. ₹3,000
• B. ₹4,000
• C. ₹3,689
• D. ₹3,600

Answer 1

Answer:

C. ₹3,689

Principal (P = ₹8000)

Rate (R = 12%) per annum

Time (= 3) years (4) months

Since compounding is annual:

First calculate amount for 3 years:

$8000\left(1+\frac{12}{100}\right)^3$

$= 8000(1.12)^3$
$= 8000 \times 1.404928$
$= ₹11239.424$

For the remaining 4 months, simple interest is added on this amount:

$SI = \frac{11239.424 \times 12 \times 4}{100 \times 12}$

$= ₹449.57696$

Total amount:

$11239.424 + 449.57696 = ₹11689.00096$
Compound Interest:

$11689.00096 - 8000 = ₹3689.00096$

Therefore, the compound interest is approximately ₹3,689.