Multiple choice

Ranjana borrowed the money Rs$1,00,000$ for $3$ years at the rate $3.5\%$ p.a. compounded annually. Calculate interest to be paid.

  1. $10871$
  2. $1000$
  3. $8710$
  4. $245$
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A Correct answer
Explanation

The compound interest formula is A = P(1 + r/100)^n. For P = 100,000, r = 3.5, and n = 3, the amount is 100,000 * (1.035)^3 = 110,871.78. The interest is 110,871.78 - 100,000 = 10,871.78, which rounds to 10,871.

AI explanation

Calculate the final amount using the compound interest formula A = 100000(1 + 0.035)^3. Evaluating this expression gives the total amount as 108717.875. The interest paid is the final amount minus the principal of 100000, which is 10871.

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