Multiple choice

The bank offers interest of at rate $7\%$ p.a compounded yearly. What interest will be received at the end of $5$ years if Rs.$10,000$ are deposited. Calculate by the method of compound interest.

  1. $4000$
  2. $4025.5$
  3. $4035$
  4. $3025$
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Compound interest formula is A = P(1 + r/100)^n. For P=10000, r=7, n=5, A = 10000 * (1.07)^5 = 10000 * 1.4025517 = 14025.517. The interest is A - P = 4025.5.

AI explanation

Using the compound interest formula, Amount equals Principal multiplied by the quantity of 1 plus Rate divided by 100 raised to the time. The calculation is 10,000 multiplied by 1.07 raised to the power of 5. This results in a total amount of 14,025.517, and subtracting the original principal of 10,000 gives an interest of 4025.5.

Keep practicing — related questions