If in 2 years at simple interest the principal increases by 18%, what will be the compound interest (in Rs) earned on Rs 7000 in 3 years at the same rate?

Let the principal amount = Rs. $$100x$$

=> Simple interest = $$\frac{18}{100}\times100x=Rs.$$ $$18x$$

Let rate of interest = $$r\%$$ and time period = 2 years

=> $$S.I. = \frac{P \times r \times t}{100}$$

=> $$\frac{100x\times r\times2}{100}=18x$$

=> $$2r=18$$

=> $$r=\frac{18}{2}=9\%$$

Now, Sum under compound interest = Rs. 7000 and time = 3 years

$$\therefore$$ Compound interest = $$P[(1+\frac{r}{100})^t-1]$$

= $$7000[(1+\frac{9}{100})^3-1]$$

= $$7000[(\frac{109}{100})^3-1]$$

= $$7000 \times (\frac{1,295,029-1,000,000}{1,000,000})$$

= $$7 \times 295.029=Rs.$$ $$2065.2$$

=> Ans - (B)