What is the compound interest on ₹23,000 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: ₹23,000 → ₹25,300. Year 2: ₹25,300 → ₹27,830. Year 3: ₹27,830 → ₹30,613. Compound interest = ₹30,613 − ₹23,000 = ₹7,613, which is 33.1% of the principal. Simple interest for 3 years would be only 30%, ₹6,900.