How much will a principal of ₹5000 invested on compound interest (compounded annually) amount to, in three years at a rate of 50% per annum?
Answer & explanation
Correct answer: option 3
The Formula that we used here is -
Amount = P$(1 \;+\; \frac{R}{100})^t$
= 5000 [ 1 + \(\frac{50}{100}\)]³
= 5000 [ 1 + \(\frac{1}{2}\)]³
= 5000 [ \(\frac{3}{2}\)]³
= [ 1 + \(\frac{R}{100}\) ]³
= 5000 × \(\frac{3}{2}\)× \(\frac{3}{2}\)× \(\frac{3}{2}\)
= 16875