# A man lends Rs.12500 at 12% for the first year, at 15% for the second year and at 18% for the third year. If the rates of interest are compounded yearly; find the difference between the C.I. of the first year and the compound interest for the third year.

Answer

Verified

381.6k+ views

Hint: We are going to solve the given problem by using the formula of compound interest.

Formula for compound interest is $A = P\left( {1 + \frac{R}{{100}}} \right)$

Where, A is the amount, P is the principal (initial) amount, R is the rate of interest in %.

In the first year P = 12500, R = 12%

$A = 12500\left( {1 + \frac{{12}}{{100}}} \right)$

$A = 12500\left( {\frac{{112}}{{100}}} \right) = 14000$

Then the interest for the first year = Rs.14000 – Rs.12500 = Rs.1500

In Second year,

P=Rs.14000

Given R=15%

$A = 14000\left( {1 + \frac{{15}}{{100}}} \right) = 16100$

In Third year,

P = 16100

Given R = 18%

$A = 16100\left( {\frac{{115}}{{100}}} \right) = 16100$

$A = 16100\left( {\frac{{118}}{{100}}} \right) = 18898$

Then the interest for the third year = Rs.18998 – Rs.16100 = Rs.2898

$\therefore $Difference of interest between third and first year = Rs.2898 – Rs.1500 = Rs.1398

Note: Compound interest is a method of calculating interest where the interest earned over time is added to the principal amount.

Formula for compound interest is $A = P\left( {1 + \frac{R}{{100}}} \right)$

Where, A is the amount, P is the principal (initial) amount, R is the rate of interest in %.

In the first year P = 12500, R = 12%

$A = 12500\left( {1 + \frac{{12}}{{100}}} \right)$

$A = 12500\left( {\frac{{112}}{{100}}} \right) = 14000$

Then the interest for the first year = Rs.14000 – Rs.12500 = Rs.1500

In Second year,

P=Rs.14000

Given R=15%

$A = 14000\left( {1 + \frac{{15}}{{100}}} \right) = 16100$

In Third year,

P = 16100

Given R = 18%

$A = 16100\left( {\frac{{115}}{{100}}} \right) = 16100$

$A = 16100\left( {\frac{{118}}{{100}}} \right) = 18898$

Then the interest for the third year = Rs.18998 – Rs.16100 = Rs.2898

$\therefore $Difference of interest between third and first year = Rs.2898 – Rs.1500 = Rs.1398

Note: Compound interest is a method of calculating interest where the interest earned over time is added to the principal amount.

Recently Updated Pages

Define absolute refractive index of a medium

Find out what do the algal bloom and redtides sign class 10 biology CBSE

Prove that the function fleft x right xn is continuous class 12 maths CBSE

Find the values of other five trigonometric functions class 10 maths CBSE

Find the values of other five trigonometric ratios class 10 maths CBSE

Find the values of other five trigonometric functions class 10 maths CBSE

Trending doubts

Fill the blanks with the suitable prepositions 1 The class 9 english CBSE

Difference between Prokaryotic cell and Eukaryotic class 11 biology CBSE

How many meters are there in a kilometer And how many class 8 maths CBSE

What is pollution? How many types of pollution? Define it

Change the following sentences into negative and interrogative class 10 english CBSE

What were the major teachings of Baba Guru Nanak class 7 social science CBSE

Difference Between Plant Cell and Animal Cell

Give 10 examples for herbs , shrubs , climbers , creepers

Draw a labelled sketch of the human eye class 12 physics CBSE