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Calculate the compound interest on Rs. 80,000 for 3 years if the rate of interest for the 3 successive years are 4%, 5% and 10% respectively.
Given:
Principal $P=Rs.\ 80000$
Rate of interest for 3 successive years $R_1, R_2$ and $R_3$ are $4 \%, 5 \%$ and $10 \%$ respectively.
Time $T= 3$ years
To do:
We have to find compound interest.
Solution:
We know that,
$A = P(1 + \frac{R_1}{100}) (1 + \frac{R_2}{100})(1+\frac{R_3}{100})$
A - Amount
P - Principle
R - Rate of Interest
Here,
$P = 80000, R_1 = 4 \%, R_2 =5 \%, R_3=10 \%$
$A = 80000(1 + \frac{4}{100}) (1 + \frac{5}{100})(1 + \frac{10}{100})$
$A = 80000(1 + \frac{1}{25}) (1 + \frac{1}{20})(1 + \frac{1}{10})$
$A = 80000 (\frac{26}{25}) (\frac{21}{20})(\frac{11}{10})$
$A = \frac{80 \times 26 \times 21 \times 11}{5}$
$A = 16\times6006$
$A = 96096$
Amount $=Rs.\ 96096$
Compound Interest $=$Amount$-$Principal
Compound Interest $= Rs.\ (96096-80000)$
Compound Interest $=Rs.\ 16096$.