Mohan borrowed ₹ 16,000 for 3 years at 5% per annum compound interest. Calculate the amount that Mohan would have to pay at the end of 3 years.

Given:

P = ₹ 16,000

n = 3 years

R = 5%

As we know,

$\text{A} = P\Big[1 + \dfrac{R}{100}\Big]^n\\[1em] = 16,000\Big[1 + \dfrac{5}{100}\Big]^3\\[1em] = 16,000\Big[1 + \dfrac{1}{20}\Big]^3\\[1em] = 16,000\Big[\dfrac{20}{20} + \dfrac{1}{20}\Big]^3\\[1em] = 16,000\Big[\dfrac{(20 + 1)}{20}\Big]^3\\[1em] = 16,000\Big[\dfrac{21}{20}\Big]^3\\[1em] = 16,000\Big[\dfrac{9261}{8000}\Big]\\[1em] = \Big[\dfrac{14,81,76,000}{8000}\Big]\\[1em] = 18,522$

Hence, amount = ₹ 18,522