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

To calculate the compound interest on an amount, you can use the formula:

Compound Interest Formula

The formula for compound interest is:

A = P (1 + r/n)^(nt)

• A = the amount of money accumulated after n years, including interest.
• P = the principal amount (the initial sum of money).
• r = annual interest rate (decimal).
• n = number of times that interest is compounded per year.
• t = the number of years the money is invested or borrowed.

Given Values

• Principal (P) = Rs. 12,000
• Rate (r) = 12% = 0.12
• Time (t) = 10 years
• Compounding Frequency (n) = 1 (annually)

Calculation Steps

Substituting the values into the formula:

A = 12000 (1 + 0.12/1)^(1*10)

This simplifies to:

A = 12000 (1 + 0.12)^(10)

A = 12000 (1.12)^(10)

Calculating (1.12)^(10) gives approximately 3.478.

Now, multiply this by the principal:

A ≈ 12000 * 3.478 ≈ 41736

Finding Compound Interest

To find the compound interest, subtract the principal from the total amount:

Compound Interest = A - P

Compound Interest ≈ 41736 - 12000 ≈ 29736

Final Result

The compound interest on Rs. 12,000 for 10 years at an annual rate of 12% is approximately Rs. 29,736.