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Question:

Calculate the amount and compound interest on Rs. 10,800 for 3 years at 12 1/2%

Solution:

a) Given: Principal (P) = Rs. 10800, Rate (R) = 12 1/2% = 25/2% = 0.125, Time (n) = 3 years

Formula for Compound Interest:
A = P (1 + R/100)^n
Where:
A = Amount
P = Principal
R = Rate of interest
n = Number of years

Substituting the given values:
A = 10800 (1 + 0.125)^3
A = 10800 (1.125)^3
A = 10800 (1.423828125)
A = Rs. 15386.25

Compound Interest (CI) = A - P
CI = 15386.25 - 10800
CI = Rs. 4586.25

Therefore, the amount after 3 years is Rs. 15386.25 and the compound interest is Rs. 4586.25