Calculate the compound interest earned on Rs. 25,000 invested for 3 years at an annual interest rate of 12%.

Explanation

To find the compound interest, first compute the total amount using the formula: Amount = Principal × (1 + Rate/100)^Time = 25000 × (1 + 0.12)^3 = 25000 × (1.12)^3 = 25000 × 1.404928 = Rs. 35123.20. The compound interest is the difference between the total amount and the principal: 35123.20 - 25000 = Rs. 10123.20.