Question

There is $100$% increase in an amount in $8$ years,at simple interest. Find the compound interest on Rs. $8000$ after $2$ years at the same rate of interest.

• A. Rs.$2500$
• B. Rs.$2000$
• C. Rs.$2250$
• D. Rs. $2125$

Answer 1

The correct option is D Rs. $2125$

Let the principal be Rs.x.
As it is 100% increased so it becomes Rs. 2x.
Interest = 2x - x = Rs.x.
Now, SI = $\frac{P\times R\times T}{100}$
x = $\frac{x\times R\times 8}{100}$
R = 12.5%
Now CI on Rs.8000 for 2 years is given by
CI = 8000 $\times {(1+\frac{12.5}{100})}^2-8000$
Ci = 8000 $\times {(1+\frac{1}{8})}^2-8000=8000\times \frac{9}{8}\times \frac{9}{8}-8000$
= $\frac{81000-64000}{8}=\frac{17000}{8}=Rs.2125$