Question
Download Solution PDFA vendor lends 72,000 rupees at a rate of 12% of compound interest per annum, compounded annually. Find the interest for the 3rd year (approximate value).
Answer (Detailed Solution Below)
Detailed Solution
Download Solution PDFGiven:
Lend amount = Rupees 72,000
Rate = 12% per annum
Time = 3 years
Compounded annually
Concept used:
CI = Total amount - Principal
P(1 + R/100)N - P
Where, P = Principal, R = Rate of interest, N = Time (in years)
Calculation:
Amount at the end of 1st year
⇒ 72000 × (1 + 12/100)
⇒ 72000 × (112/100)
⇒ Rs. 80640
Amount at the end of 2nd year
⇒ 80640 × (1 + 12/100)
⇒ 80640 × (112/100)
⇒ 90316.8 ≈ Rs. 90317
Interest at the end of 3rd year
⇒ 90317 × (1 + 12/100) - 90317
⇒ 90317 × (112/100) - 90317
⇒ 101155 - 90317
⇒ Rs. 10838
∴ The interest for the 3rd year is Rs. 10838.
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