# Rs. 10240 for 3 years at 12% per annum compounded annually.

Present value = Rs.10240

Interest rate = (25/2) % per annum

Time = 3 years

Amount (A) = P (1 + R/100)n [Where, P = Present value

R = Annual interest rate

n = Time in years]

A = 10240 [1 + (25/2)/100]3

A = 10240 [1 + 1/8]3

A = 10240 [9/8]3

A = 10240 × 9/8 × 9/8 × 9/8

A = 10240 × 729/512

A = 20 × 729

A = 14580

Amount = Rs.14580

Compound interest = Rs.(14580 – 10240)

= Rs.4340

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