A man invests 46875 at 4% per annum compound interest for 3 years

A man invests 46875 at 4% per annum compound interest for 3 years

A man invests 46875 at 4% per annum compound interest for 3 years. Calculate:

(i)  the interest for the first year.

(ii) the amount standing to his credit at the end of the second year.

(iii)the interest for the third year.

Solution:

Principal= Rs 46875

Rate of interest = 4%

Therefore, interest for the first year

= Prt/100

=(46875×4×1)/100

= Rs 1875

Again,

Principal for the second year

= 46875+1875=48750

Interest for the second year

=(48750×4×1)/100

= Rs 1950

Again,

Amount at the end of second year

= 48750+1950

= Rs 50700

And,

Interest for the third year

=(50700×4×1)/100

=Rs 2028

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