What Will be The Interest?
Answer: (2) Rs.1323
Let the principal be Rs.X.
Rate = 5 %, Compound Interest = Rs.1200, time = 1 year.
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
Principal for second year = Amount of first year
Then. the Compound Interest of second year
= 25200 x 5 x 1/100
= 252 x 5
The amount of second year = 25200 + 1260
The amount of second year = the principal of third year
Then, the compound interest of third year = 26460 x 5 x 1/100
Hence the answer is (2) Rs.1323.