Multiple choice

What will be the compound interest on Rs. 10,000 for 3 years at the rate of 10% during the first year, 15% during the second year and 8% during the third year?

  1. Rs. 3662

  2. Rs. 2680.43

  3. Rs. 13,662

  4. Rs. 3626

  5. Rs. 23,662
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A Correct answer
Explanation

Amount = 10000 * (1 + 0.1) * (1 + 0.15) * (1 + 0.08) = 10000 * 1.1 * 1.15 * 1.08 = 13662. Compound interest = 13662 - 10000 = 3662.

AI explanation

Using the successive percentage change formula for compound interest, the final amount equals 10000 multiplied by 1.10, then by 1.15, and then by 1.08, which equals Rs. 13662. The compound interest is the final amount minus the original principal, so 13662 minus 10000 equals 3662. The result is Rs. 3662.

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