Find the amount and the compound interest on ₹ 12000 in 3 years at 5%; interest being compounded annually.

Given,

P = ₹ 12000

n = 3 years

r = 5%

By formula,

$A = P\Big(1 + \dfrac{r}{100}\Big)^n$

Substituting values we get :

$\Rightarrow A = 12000\Big(1 + \dfrac{5}{100}\Big)^3 \\[1em] \Rightarrow A = 12000\Big(1 + \dfrac{1}{20}\Big)^3 \\[1em] \Rightarrow A = 12000\Big(\dfrac{21}{20}\Big)^3 \\[1em] \Rightarrow A = 12000 \times \dfrac{9261}{8000} \\[1em] \Rightarrow A = ₹13891.50$

C.I. = A - P = ₹ 13891.50 - ₹ 12000 = ₹ 1891.50

Hence, amount = ₹ 13891.50 and compound interest = ₹ 1891.50