Answer :
Final answer:
The compound interest on Rs 7000 for 3 years at 5% per annum compounded annually is Rs 966.25.
Explanation:
To find the compound interest on Rs 7000 for 3 years at 5% per annum compounded annually, we use the formula:
Compound Interest = P(1 + r/n)nt - P
where P is the principal amount, r is the interest rate, n is the number of times interest is compounded per year, and t is the number of years. Plugging in the given values:
Compound Interest = 7000(1 + 0.05/1)1 * 3 - 7000 = Rs 966.25
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