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Question

A man invests ₹ 3000 for three years at compound interest. After one year, the money amounts to ₹ 3240. Find the rate of interest and the amount (approximated to the nearest rupee) at the end of 3 years.


A

(i) 8% (ii) ₹ 3779

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B

(i) 8% (ii) ₹ 3799

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C

(i) 5% (ii) ₹ 3799

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D

(i) 5% (ii) ₹ 3779

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Solution

The correct option is A

(i) 8% (ii) ₹ 3779


Let the rate of interest be r.
For the first year, C.I = S.I
Given that the amount at the end of first year = ₹ 3240
Hence, I = ₹ 3240 - ₹ 3000 = ₹ 240

I = PTR100

For T = 1 year and I = ₹ 240,
240 = 3000×1×R100
R = 240×1003000
R = 8%

Principal for the second year = ₹ 3240
Hence, I = 3240×1×8100
= ₹ 259.20
Principal for the third year
= ₹ 3240 + ₹ 259.20
= ₹ 3499.20
Hence I = 3499.20×1×8100
= ₹ 279.936
Amount = 3499.20 + 279.936
=₹ 3779.136
= ₹ 3779 ( approximated to the nearest rupee)


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