What is the compound interest on ₹31,000 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: ₹31,000 → ₹34,100. Year 2: ₹34,100 → ₹37,510. Year 3: ₹37,510 → ₹41,261. Compound interest = ₹41,261 − ₹31,000 = ₹10,261, which is 33.1% of the principal. Simple interest for 3 years would be only 30%, ₹9,300.