What Will be The Interest?

If the first year’s interest on a certain sum of money placed at 5% per annum compound interest is Rs.1200, What will be the interest for the 3rd year?

  1. Rs. 1220
  2. Rs. 1323
  3. Rs. 1423
  4. Rs. 1330

 

Monis Rasool Professor Asked on 28th July 2015 in Maths.
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  • 1 Answer(s)

    Answer: (2) Rs.1323
    Explanation:-
    Let the principal be Rs.X.
    Given-
    Rate = 5 %, Compound Interest = Rs.1200, time = 1 year.
    Formula-
    Simple Interest = P x R x T/100
    Where, P = principal , R = rate, & T = time.
    Then, 1200 = X x 5 x 1/100
    1200 = X/20
    X = 1200 x 20
    X = Rs.24000
    The principal is Rs.24000
    Then, the amount of first year  = 2400 + 1200
    = Rs.25200
    Principal for second year = Amount of first year
    Then. the Compound Interest of second year
    = 25200 x 5 x 1/100
    = 252 x 5
    = Rs.1260
    The amount of second year = 25200 + 1260
    = Rs.26460
    The amount of second year = the principal of third year
    Then, the compound interest of third year = 26460 x 5 x 1/100
    = RS.1323
    Hence the answer is (2) Rs.1323.

    Anurag Mishra Professor Answered on 2nd August 2015.
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