What will be the Compound Interest? If

If the simple interest on a certain sum at 5% per annum for 3 years is Rs. 1,200. then the compound interest on the same sum for the same period at the same rate is

  1. Rs. 1261
  2. Rs. 1260
  3. Rs. 1265
  4. Rs. 1263
Monis Rasool Professor Asked on 14th November 2015 in Maths.
Add Comment
1 Answer(s)

Answer: (1) Rs. 1261

Explanation:-
Let the principal be Rs. X

Given-
Rate = 5%, Time = 3 years  and simple interest = Rs. 1200

Then, 1200 = X x 5 x 3 /100
400 = X/20
X = 400 x 20
X  = Rs. 8000

Then, the compound interest for 3 years,
Amount = 8000 (1 + 5/100)^3
= 8000 x (1 + 1/20)^3
= 8000 x (21/20)^3
= 8000 x 21 x 21 x  21 /20 x 20 x 20
= 21 x 21 x 21
= Rs. 9261

So, the compound interest = 9261 – 8000
= Rs. 1261

Then, the compound interest on the same sum for the same period at the same rate is Rs. 1261.

Hence, the answer is (1) Rs. 1261.

Anurag Mishra Professor Answered on 14th November 2015.
Add Comment

Your Answer

By posting your answer, you agree to the privacy policy and terms of service.