Simple interest on a certain sum of money for 3 years at 5% per annum is Rs 600. Find the compound interest on this Sum at the same rate after 3 years, the interest being reckoned annually.

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Solution

For ,
$N = 3 y e a r s$
$R = 5$ %
We have $S . I . = \frac{P N R}{100} = R s 600$
$=> \frac{P \times 3 \times 5}{100} = 600$
$=> P = R s 4, 000$
And on interest being compounded for 2 years, $A m o u n t = P {(1 + \frac{R}{100})}^{N} = 4, 000 \times {(1 + \frac{5}{100})}^{3} = 4, 000 \times {1.05}^{3} = R s 4, 630.50$
So, $C . I . = A - P = R s 4, 630.50 - R s 4, 000 = R s 630$

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Simple interest on a certain sum of money for 3 years at 5% per annum is Rs 600. Find the compound interest on this Sum at the same rate after 3 years, the interest being reckoned annually.

For ,N=3yearsR=5 % We have S.I.=PNR100=Rs600=>P×3×5100=600=>P=Rs4,000And on interest being compounded for 2 years, Amount=P(1+R100)N=4,000×(1+5100)3=4,000×1.053=Rs4,630.50So, C.I.=A−P=Rs4,630.50−Rs4,000=Rs630