# How Much Will be Compound Interest?

The simple interest accrued on an amount of 25,000 at the end of four years is 8000 What would be the compound interest accrued on the same amount at the same rate in the same period?

- 8612.256
- 9005.256
- 012.22
- None of these

**Answer: (4) None of these**

**Explanation:-**

**Given-**

Principal = Rs.25,000, Time = 4 years, Simple Interest = Rs.8000

**Formula-**

**Simple Interest = P x R x T/100**

**Where, P = principal , R = rate, & T = time.**

Then,

8000 = 25000 x 4 x R/100

8 = 25 x R/25

R = 8 %

**Formula-**

**Compound Interest = P [(1 + R/100) ^{t} – 1]**

**Where, P = principal, R = rate, t = time.**

Then, Compound Interest = 25000[(1 + 8/100)

^{4}– 1] = 25000 [(1 + 2/25)

^{4}– 1]

= 25000 [(27/25)

^{4}– 1]

= 25000 x 27 x 27 x 27 x 27 /25 x 25 x 25 x 25 – 25000

= 1000 x 27 x 27 x 27 x 27 /25 x 25 x 25 – 25000

= 40 x 27 x 27 x 27 x27 /25 x 25 – 25000

= 8 x 27 x 27 x 27 x 27 /5 x 25 – 25000

= 4251528/5 x 25 – 25000

= 34012.22 – 25000

= 9012.224

Hence, the answer is (4) None of these.