Find the compound interest on ₹ 3125 for 3 years.

Find the compound interest on ₹ 3125 for 3 years if the rates of interest for the first, second and third year are respectively 4%, 5% and 6% per annum.

Solution:

It is given that
Principal (P) = ₹ 3125
Rate of interest for continuous = 4%, 5% and 6%
Period (n) = 3 years
We know that
Amount = P (1 + r/100)n
Substituting the values
= 3125 (1 + 4/100) (1 + 5/100) (1 + 6/100)
By further calculation
= 3125 × 26/25 × 21/50 × 53/50
= ₹ 3617.25
Here
CI = A – P
Substituting the values
= 3617.25 – 3125
= ₹ 492.25

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