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Question

A certain sum of money amounts to Rs. 23,400 in 3 years at 10% per annum simple interest. Find the amount of same sum in 2 years at at 10% p.a. compound interest.

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Solution

For ,
N=3 years
R=10%
We have Amount=P+S.I.=P+PNR100=Rs.23,400
=>P+P×3×10100=23,400
=>1.3P=Rs.23,400
=>P=Rs.18,000
And on interest being compounded for 2 years, at R=10 % Amount=P(1+R100)N=18,000×(1+10100)2=18,000×1.12=Rs.21,780

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