Question:
Tick (✓) the correct answer:
The compound interest on Rs 10000 at 10% per annum for 3 years, compounded annually, is
(a) Rs 1331
(b) Rs 3310
(c) Rs 3130
(d) Rs 13310
Solution:
(b) Rs. 3310
$A=P \times\left(1+\frac{R}{100}\right)^{n}$
$=$ Rs. $10000 \times\left(1+\frac{10}{100}\right)^{3}$
$=$ Rs. $10000 \times\left(\frac{110}{100}\right)^{3}$
$=$ Rs. $10000 \times\left(\frac{11}{10}\right)^{3}$
$=$ Rs. $10000 \times\left(\frac{11}{10}\right) \times\left(\frac{11}{10}\right) \times\left(\frac{11}{10}\right)$
$=$ Rs. $(10 \times 11 \times 11 \times 11)$
$=$ Rs. 13310
$\therefore$ Compound interest $=$ amount $-$ principal $=$ Rs $(13310-10000)=$ Rs 3310