Deepa's deposit earns compound interest at 5% in the first year, 10% in the second and 20% in the third. What is the compound interest on ₹10,000 over the 3 years?

Explanation

1. 01

   Amount = $10000 \times 1.05 \times 1.10 \times 1.20$.

2. 02

   $10{,}000 \times 1.05 = 10{,}500$; × $1.10 = 11{,}550$; × $1.20 = 13{,}860$.

3. 03

   CI = ₹13,860 − ₹10,000 = ₹3,860.