Question

Find the compound interest at the rate of 5% per annum for 3 years on that principal which in 3 years at the rate of 5% per annum gives Rs 1200 as simple interest.

Answer 1

$$\begin{gathered} \mathrm{We}\mathrm{know}\mathrm{that}: \\ \mathrm{P}=\frac{\mathrm{SI}\times 100}{\mathrm{RT}} \\ \therefore \mathrm{P}=\frac{1200\times 100}{5\times 3} \\ =8,000 \\ \mathrm{Now}, \\ \mathrm{A}=\mathrm{P}{\left(1+\frac{\mathrm{R}}{100}\right)}^{\mathrm{n}} \\ =8,000{\left(1+\frac{5}{100}\right)}^3 \\ =8,000{\left(1.05\right)}^3 \\ =9,261 \\ \mathrm{Now}, \\ \mathrm{CI}=\mathrm{A}-\mathrm{P} \\ =9,261-8,000 \\ =1,261 \\ \mathrm{Thus},\mathrm{the}\mathrm{required}\mathrm{compound}\mathrm{interest}\mathrm{is}\mathrm{Rs}1,261. \end{gathered}$$