Find the compound interest on Rs. 12000 for 10 years at the rate of 12% per annum compounded annually.

Explanation

We know that amount A at the end of n years at the rate of r% per annum when the interest is compounded annually is given by
` A = P (1+r/100)^(n)`
Here, ` P = Rs. 12000, r = 12, and n = 10` .
` :. A = Rs.[12000(1+12/100)^(10)]`
` = Rs. [ 12000(1+3/25)^(10)]`
` = Rs. [ 12000((25+3)/25)^(10)]`
` = Rs.[12000(28/25)^(10)]`
Now, ` A = Rs. 12000(28/25)^(10)`
` rArr log A = log 12000+10(log 28- log 25)`
` = 4.0792+10 (1.4472-1.3979)`
` = 4.0792+0.493=4.5722`
` rArr A =" antilog "(4.5722) = 37350`.
So, the amount after 10 years is Rs. 37350.
Hence, Compound interest = Rs. (37350 - 12000) = Rs. 25350.