Find the amount of Rs 2400 after 3 years,
Question:

Find the amount of Rs 2400 after 3 years, when the interest is compounded annually at the rate of 20% per annum.

Solution:

Given:

$\mathrm{P}=\mathrm{Rs} 2,400$

$\mathrm{R}=20 \%$ p. $\mathrm{a}$

$\mathrm{n}=3$ years

We know that amount $\mathrm{A}$ at the end of $\mathrm{n}$ years at the rate $\mathrm{R} \%$ per annum when the interest is compounded annually is given by $\mathrm{A}=\mathrm{P}\left(1+\frac{\mathrm{R}}{100}\right)^{\mathrm{n}}$.

$\therefore \mathrm{A}=2,400\left(1+\frac{20}{100}\right)^{3}$

$=2,400(1.2)^{3}$

v

Thus, the required amount is Rs $4,147.20$.