Osama invested Rs.8,000 for 3 years at 5% C.I in a post office. If the interest is compounded once in a year, what sum will he get after 3 years?
To calculate the sum Osama will get after 3 years with a compound interest of 5% per annum, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = Total amount after the specified time period
P = Principal amount (initial investment)
r = Interest rate (in decimal form)
n = Number of times interest is compounded per year
t = Time period (in years)
In this case, we have:
P = Rs. 8,000
r = 5% = 5/100 = 0.05
n = 1 (interest is compounded once a year)
t = 3 years
Plugging the values into the formula, we get:
A = 8000(1 + 0.05/1)^(1*3)
= 8000(1 + 0.05)^3
= 8000(1.05)^3
Now, let's calculate the final amount.
A = 8000(1.05)^3
= 8000 * 1.157625
= Rs. 9,260.20 (rounded to two decimal places)
Therefore, Osama will get Rs. 9,260.20 after 3 years of investing Rs. 8,000 at a compound interest rate of 5% per annum.