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

To calculate the compound interest, we use the formula:

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

Where: A = the amount of money accumulated after n years, including interest. P = principal amount (the initial amount of money) r = annual interest rate (in decimal) n = number of times that interest is compounded per year t = time the money is invested for in years

Given in the problem: P = Rs. 25,000 r = 12% per annum = 0.12 (in decimal) n = 1 (since it is compounded annually) t = 3 years

Substituting these values into the formula:

A = 25000 (1 + 0.12/1)^(1*3) A = 25000 (1 + 0.12)^3 A = 25000 * 1.12^3 A = 25000 * 1.404928 A = Rs. 35123.2

The compound interest is then calculated by subtracting the initial principal from the compounded amount:

Compound Interest = A - P Compound Interest = Rs. 35123.2 - Rs. 25000 Compound Interest = Rs. 10123.2

So, the compound interest on a sum of Rs. 25,000 after 3 years at the rate of 12% per annum is Rs. 10123.2.