Surabhi borrowed a sum of Rs. 12000 from a finance company to purchase a refrigerator. If the rate of interest is 5% per annum compounded annually, calculate the compound interest that Surabhi has to pay to the company after 3 years.
Given details are,
Principal (p) = Rs 12000
Rate (r) = 5 %
Time = 3years
By using the formula,
A = P (1 + R/100)n
= 12000 (1 + 5/100)3
= 12000 (105/100)3
= Rs 13891.5
∴ Compound Interest = A – P = Rs 13891.5 – Rs 12000 = Rs 1891.5
