What is the compound interest on ₹30,000 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: ₹30,000 → ₹33,000. Year 2: ₹33,000 → ₹36,300. Year 3: ₹36,300 → ₹39,930. Compound interest = ₹39,930 − ₹30,000 = ₹9,930, which is 33.1% of the principal. Simple interest for 3 years would be only 30%, ₹9,000.