Question 35

In 4 years at simple interest the principal increases by 32%. What will be the compound interest earned (in Rs) on Rs. 24,000 in 3 years at the same rate?

Solution

I = 32% of P

I = PTR/100

$$\frac{32P}{100}=\frac{P(4)R}{100}\rightarrow R=8$$%

Under CI,

Total amount = P$$(1+\frac{R}{100})^{n}$$

= 24000$$(1+\frac{8}{100})^{3}$$

= 24000$$(1+\frac{2}{25})^{3}$$

= 24000$$(\frac{27}{25})^{3}$$

= 24000($$\frac{19683}{15625}$$)

= 30,233.088

CI =30,233.088- 24000 = 6233.088

So the answer is option D.

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