Find the compound interest on Rs.50000 for 3 years if the rate of interest is 5% for the first year, 6% for the second year and 10% for the third year.

Correct option is A

Given:
Rs. 50000 for 3 years if the rate of interest is 5% for the first year, 6% for the second year, and 10% for the third year.
Concept used:
One year of compound interest on a certain sum of money is equal to the one-year of simple interest on the same amount.
Simple Interest, SI = (P × R × T)/100
Amount = P + SI
Where,
P = Principal amount
R = Rate of interest per year
T = Time in years
Solution:
According to the concept,
The amount becomes at the end of the first year
⇒ 50,000 + (50,000 × 5 × 1)/100
⇒ 50,000 + 2500
⇒ 52,500
The amount becomes at the end of the second year
⇒ 52,500 + (52,500 × 6 × 1)/100
⇒ 52,500 + 3150
⇒ 55,650
The amount becomes at the end of the third year
⇒ 55,650 + (55,650 × 10 × 1)/100
⇒ 55,650 + 5565
⇒ 61,215
Now, the compound interest incurred
⇒ 61,215 - 50,000
⇒ 11,215
The compound interest on Rs. 50000 for 3 years if the rate of interest is 5% for the first year, 6% for the second year, and 10% for the third year is Rs. 11215.