Multiple choice

Calculate the compound interest for the third year on Rs. $15,000$ invested for $5$ years at $10\%$ per annum.

  1. Rs. $1815$
  2. Rs. $1825$
  3. Rs. $1845$
  4. Rs. $1875$
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The compound interest for the third year is simply the simple interest on the accumulated amount at the end of the second year. The amount after two years is 15000 * (1 + 0.10)^2 = 18150. Taking 10% of this amount gives the interest for the third year, which is 1815.

AI explanation

To find the compound interest specifically for the third year, we calculate the total amount at the end of the second year as 15000 times (1 plus 0.10) squared, which equals 18150. The interest earned during the third year is 10% of this accumulated amount, so 18150 times 0.10 gives Rs. 1815.

Keep practicing — related questions