Question 54
A sum increases by 100% in 8 years at a certain rate of Simple Interest. What will be the Compound Interest on Rs.8000 after 2 years at the same rate of interest?
Solution
Let say, rate of interest= r%.
So, P(1+8r/100)=2P
or, 8r/100=1
or, r =12.5 %.
So, compounded amount=
$$8000(1+0.125)^2$$
=10125.
Compound interest=10125-8000=2125 Rs.
A is correct choice.
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