# 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?

1. 8612.256
2.  9005.256
3.  012.22
4.  None of these Gopal Default Asked on 30th July 2015 in
• 1 Answer(s)

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.

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