Question

Find the interest and amount to be paid at the end of 3 years for a principal of Rs. 15000 at 5% per annum.

Answer 1

per annum, namely compound interest with an APR of 5%.

$~~~~~~ \textit{Compound Interest Earned Amount} \\\\ A=P\left(1+\frac{r}{n}\right)^{nt} \quad \begin{cases} A=\textit{accumulated amount}\\ P=\textit{original amount deposited}\dotfill &\ 15000\\ r=rate\to 5\%\to \frac{5}{100}\dotfill &0.05\\ n= \begin{array}{llll} \textit{times it compounds per year}\\ \textit{per annum, thus once} \end{array}\dotfill &1\\ t=years\dotfill &3 \end{cases}$

$A=15000\left(1+\frac{0.05}{1}\right)^{1\cdot 3}\implies A=15000(1.05)^3\implies A=17364.375 \\\\[-0.35em] ~\dotfill\\\\ \stackrel{\textit{the interest earned is simply}}{17364.375 - 15000}\implies 2364.375$