Find the amount and the compound interest on ₹ 16,000 for 3 years at 5% per annum compounded annually.

Given:

P = ₹ 16,000

R = 5%

n = 3 years

$\text{A} = P\Big[1 + \dfrac{R}{100}\Big]^n\\[1em] = 16,000\Big[1 + \dfrac{5}{100}\Big]^3\\[1em] = 16,000\Big[1 + \dfrac{1}{20}\Big]^3\\[1em] = 16,000\Big[\dfrac{20}{20} + \dfrac{1}{20}\Big]^3\\[1em] = 16,000\Big[\dfrac{(20 + 1)}{20}\Big]^3\\[1em] = 16,000\Big[\dfrac{21}{20}\Big]^3\\[1em] = 16,000\Big[\dfrac{9,261}{8,000}\Big]\\[1em] = \Big[\dfrac{14,81,76,000}{8,000}\Big]\\[1em] = 18,522$

Also

$\text{Compound Interest = Final amount - Original Principal}\\[1em] = ₹ 18,522 - ₹ 16,000\\[1em] = ₹ 2,522$

Hence, amount = ₹ 18,522 compound interest = ₹ 2,522.