Question 25

There is 100% increase to an amount in 8 years, at simple interest. Find the compound interest of Rs. 8000 after 2 years at the same rate of interest.

Solution

I = PTR/100

there is 100% increase in amount means, interest = principle.

given, T = 8yrs.

I = P

P = P*8*R/100

R = 12.5%

compound interest of 8000/- at 12.5% for 2 years is

CI = total amount - 8000/-

= P$$(1+R/100)^{n}$$ - 8000/-

= 8000$$(1+12.5/100)^{2}$$ - 8000/-

= 10125 - 8000

= 2125/-

so the answer is option D.

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