Question 66

If the Simple Interest on a sum of money at 5% for 3 years is Rs.1200, what will be the Compound Interest for the same period and rate for the same sum?

Solution

$$ SI = \frac{PNR}{100} $$

$$ 1200 = \frac{P \times 3 \times 5}{100} $$

solving P = 8000

CI :

$$ Amt = P( 1 + \frac{r}{100} )^n $$

= $$ 8000( 1 + \frac{5}{100} )^3 $$

= 9261

Amount = principal + interest

9261 = 8000 + CI

solving CI = 1261

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