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What will be the compound interest on a sum of Rs. 25,000 after 3 years at the rate of 12% p.a.?

Correct answer: C. Rs. 10123.20

  • A. Rs. 9000.30
  • B. Rs. 9720
  • C. Rs. 10123.20
  • D. Rs. 10483.20

Explanation

Compound interest is Rs. 25,000 x [(1.12)^3 - 1] = Rs. 25,000 x 0.404928 = Rs. 10,123.20. Option b, Rs. 9,720, comes from using only two years of compounding instead of three.

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