What is the compound interest on ₹6,000 for 3 years at 10% per year, compounded annually?

💡 Solution & Explanation

Each year adds 10% of the amount at the start of that year. Year 1: ₹6,000 → ₹6,600. Year 2: ₹6,600 → ₹7,260. Year 3: ₹7,260 → ₹7,986. Compound interest = ₹7,986 − ₹6,000 = ₹1,986, which is 33.1% of the principal. Simple interest for 3 years would be only 30%, ₹1,800.