Multiple choice

What is the compound interest on a sum of Rs. 25,000 after three years at a rate of 12 per cent per annum interest compounded yearly?

  1. Rs. 10,123.20

  2. Rs. 9,824.00

  3. Rs. 10,520.00

  4. Rs. 9,956.86

  5. Rs. 9,726.68
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A Correct answer
Explanation

The formula for compound interest is A = P(1 + r/100)^n. Here, A = 25000 * (1 + 12/100)^3 = 25000 * (1.12)^3 = 25000 * 1.404928 = 35123.20. The interest is 35123.20 - 25000 = 10123.20.

AI explanation

Using the compound interest formula for amount, A = P * (1 + R / 100)^n, we have A = 25000 * (1 + 12 / 100)^3. This evaluates to 25000 * (1.12)^3, which is 25000 * 1.404928 = 35123.20. The compound interest is the amount minus the principal, so 35123.20 - 25000 = 10123.20. The result is Rs. 10,123.20.

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