Farida invests an amount of Rs. 4,800 for 3 years at the rate of 8 p.c.p.a. What approximate amount of compound interest will she obtain at the end of 3 years?
Solution
Correct Answer: Option E
{Formula :
If P is the principle kept at Compound Interest @ r% p.a , amount after n years will be P(1+ r/100)n}
Farida invests an amount of Rs. 4,800 for 3 years at the rate of 8 p.c.p.a.
So amount of the principle after 3 years will be \(= P{\left( {1 + \frac{r}{{100}}} \right)^n}\)
\(= 4800{\left( {1 + \frac{8}{{100}}} \right)^3}\)
\(= 4800{\left( {\frac{{108}}{{100}}} \right)^3}\)
= 6046.61
Amount of compound interest after 3 years = Rs (6046.61 – 4800) = Rs 1246.61 ≈ Rs 1247
Hence the answer is Rs 1247
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