Ashok invested Rs 18,000 for 3 years at 5% compound interest in a post office. If the interest is compounded once in a year, what sum will he get after 3 years?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is Option 2 i.e. 20,837.25.
C.I. = P(1 + R/100)T - P
here, C.I. = Compound Interest, P = Principal, R = Rate, and T = Time
⇒ C.I. = 18000(1 + 5/100)3 - 18000
⇒ C.I. = 18000(21/20)3 - 18000
⇒ C.I. = 18000(9261/8000 - 1)
⇒ C.I. = 18000 × 1261/8000
⇒ C.I. = Rs.2837.25
⇒ Amount = C.I. + Principal
⇒ Amount = 2837.25 + 18000
⇒ Amount = Rs.20837.25