Discussion of Question with ID = 010 under Compound-Interest

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Question

How much interest does an amount of Rs. 9000000 earn @5% compounded annually for 3 years?

A

Rs. 1418625.

B

Rs. 1418725.

C

Rs. 1418525.

D

Rs. 1418825.

Soln.
Ans: a

Amount A = 9000000 × $(1 + 5/100)^3$, which equals 9000000 × $105/100$ × $105/100$ × $105/100$ = 9 × 105 × 105 × 105 = Rs. 10418625. So interest = A - P = 10418625 - 9000000 = Rs. 1418625.


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