Question:
Rohit deposited Rs 8000 with a finance company for 3 years at an interest of 15% per annum. What is the compound interest that Rohit gets after 3 years?
Solution:
We know that amount $A$ at the end of n years at the rate of $R \%$ per annum is given by $A=P\left(1+\frac{R}{100}\right)^{n}$.
Given:
$\mathrm{P}=\mathrm{Rs} 8,000$
$\mathrm{R}=15 \%$ p. a
$\mathrm{n}=3$ years
Now,
$\mathrm{A}=8,000\left(1+\frac{15}{100}\right)^{3}$
$=8,000(1.15)^{3}$
$=\mathrm{Rs} 12,167$
And,
CI $=\mathrm{A}-\mathrm{P}$
$=\mathrm{Rs} 12,167-\mathrm{Rs} 8,000$
$=\mathrm{Rs} 4,167$