Jacob invests Rs 12000 for 3 years at 10% per annum. Calculate the amount and the compound interest that Jacob will get after 3 years.

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3972

4972

5972

6972

answer is A.

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Detailed Solution

Principal for the first year = Rs 12000
Rate of interest = 10% p.a.
Interest for the first year = Rs (12000 × 10 × 1) / 100
= Rs 1200
Amount at the end of first year = Rs 12000 + Rs 1200
= 13200
Principal for the second year = Rs 13200
Interest for the second year = Rs (13200 × 10 × 1) / 100
= Rs 1320
Amount at the end of second year = Rs 13200 + Rs 1320
= Rs 14520
Principal for the third year = Rs 14520
Interest for the third year = Rs (14520 × 10 × 1) / 100
= Rs 1452
Amount at the end of third year = Rs 14520 + Rs 1452
= Rs 15972
Hence,
Compound interest for 3 year = Final amount – (original) Principal
= Rs 15972 – Rs 12000
= Rs 3972

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