Question 137

The simple interest accrued on an amount of Rs. 16,500 at the end of three years is Rs. 5,940. What would be the compound interest accrued on the same amount at the same rate in the same period? (rounded off to two digits after decimal)

Solution

Principal amount = Rs. 16,500

Simple interest earned = Rs. 5,940 and time = 3 years

Let rate of interest = $$R \%$$

=> $$S.I. = \frac{P \times R \times T}{100}$$

=> $$5940 = \frac{16500 \times R \times 3}{100}$$

=> $$R = \frac{5940}{165 \times 3}$$

=> $$R = 12 \%$$

Now, compound interest accrued on the same amount at the same rate in the same period = $$P [(1 + \frac{R}{100})^T - 1]$$

= $$16,500 [(1 + \frac{12}{100})^3 - 1]$$

= $$16,500 [(\frac{28}{25})^3 - 1] = 16,500 (\frac{21952 - 15625}{15625})$$

= $$16,500 \times \frac{6327}{15625} = Rs. 6681.31$$


Create a FREE account and get:

  • Banking Quant Shortcuts PDF
  • Free Banking Study Material - (15000 Questions)
  • 135+ Banking previous papers with solutions PDF
  • 100+ Online Tests for Free

cracku

Boost your Prep!

Download App