Calculate the annual compound interest and compound amount of Rs5000 for 3 years at an interest rate of 8%

To calculate the annual compound interest and compound amount, we'll use the formula for compound interest:

\[
A = P \left(1 + \frac{r}{n}\right)^{nt}
\]

Where:
- \( A \) is the compound amount (the total amount after interest).
- \( P \) is the principal amount (initial investment), which is Rs. 5000.
- \( r \) is the annual interest rate (in decimal form), which is 8% or 0.08.
- \( n \) is the number of times interest is compounded per year (since it's annually, \( n = 1 \)).
- \( t \) is the time in years, which is 3 years.

### Step 1: Calculate the Compound Amount (A)

\[
A = 5000 \times \left(1 + \frac{0.08}{1}\right)^{1 \times 3}
\]

\[
A = 5000 \times \left(1.08\right)^3
\]

\[
A = 5000 \times 1.259712
\]

\[
A \approx Rs. 6298.56
\]

### Step 2: Calculate the Compound Interest (CI)

Compound Interest is the difference between the Compound Amount and the Principal:

\[
CI = A - P
\]

\[
CI = 6298.56 - 5000
\]

\[
CI \approx Rs. 1298.56
\]

### Final Results:
- **Compound Amount (A):** Rs. 6298.56
- **Compound Interest (CI):** Rs. 1298.56

Would you like more details or have any questions?

### Related Questions:
1. How does changing the interest rate affect the compound interest over 3 years?
2. What would be the compound amount if the interest was compounded semi-annually?
3. How does compound interest differ from simple interest in this scenario?
4. What would the compound interest be for 5 years instead of 3 years?
5. What if the principal amount was Rs. 10,000 instead of Rs. 5000?

**Tip:** The more frequently interest is compounded, the higher the compound amount will be over time.

Learn how to calculate annual compound interest and compound amount for Rs5000 at 8% interest over 3 years. Get step-by-step solutions and formulas used in compound interest calculations.

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