Find the compound interest on 12,500 at 3% per annum for 3 years when interest is compounded annually (correct to the nearest rupees).

Correct option is C

Given:

Principle = 12500

Rate = 3%

Time = 3 years

Formula used:

​$$\text { Amount }=\text { Principle }\left(1+\frac{R}{100}\right)^T$$​​

Solution:

According to the formula

​$$\begin{aligned}& \text { Amount }=12500\left(1+\frac{3}{100}\right)^3 \\& \text { Amount }=12500\times \frac{103}{100} \times \frac{103}{100} \times \frac{103}{100}\end{aligned}$$​​

=> Amount = Rs 13659

=> Total Interest earned = 13659 - 12500 = Rs. 1159.