Question 58

Simple interest on a certain sum of money for 3 years at 5% per annum is ₹ 5250. What will be the compound interest on that sum at the same rate for the same period?

Solution

P = $$\frac{S.I\times100\ }{R\times T\ }$$

P = $$\frac{5250\times100\ }{5\times3}=35000$$

Now for compound interest, P = 35000, R = 5%, T = 3

A = $$P\left(1+\frac{r}{100}\right)^n$$

A = $$35000\left(1+\frac{5}{100}\right)^3$$

A = $$35000\times\ \frac{105}{100}\times\ \frac{105}{100}\times\ \frac{105}{100}=40516.875$$

C.I = 40516.875 - 35000 = 5516.875 = 5516.88.

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