Multiple choice

What will be the compound interest on a sum of Rs.25000 after 3 years at the rate of 12 per cent p.a.?

  1. Rs. 10123.20

  2. Rs. 11123.20

  3. Rs. 12123.20

  4. Rs. 13123.20
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A Correct answer
Explanation

Compound interest = P * ((1 + r/100)^n - 1) = 25000 * ((1.12)^3 - 1) = 25000 * (1.404928 - 1) = 25000 * 0.404928 = 10123.20.

AI explanation

Using the standard compound interest formula, the final amount equals the principal multiplied by (1 + R/100) raised to the time N, so the amount is 25000 multiplied by (1.12)^3. This expands to 25000 multiplied by 1.404928, resulting in a total of Rs. 35123.20. Subtracting the original principal of Rs. 25000 from this total gives a compound interest of Rs. 10123.20.

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