Asum of Rs. 14000 is lent at compound interest (interest is compounded annually) for 3 years. If the rate of interest is 10%, then what will be the compound interest?
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e. Rs. 4,634.
| Understanding/Application |
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Principal = Rs.14000 Rate of interest = 10% Time period = 3 years Amount including C.I. for 3 years = P(1 + r/100)t |
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Amount = 14000 × (110/100) × (110/100) × (110/100) = 1331 × 14 = Rs. 18634 C.I. = A - P = 18634 - 14000 = Rs. 4634 |