Question

There is 60% increase in an amount in 6 years at simple interest rate. Calculate the compound interest of ₹12,000 after 3 years at the same rate.

Answer 1

Let P = ₹ 100. Then, S.I = ₹ 60 and T = 6 years
Using the formula for simple interest;
$S.I.=\frac{PRT}{100}$

∴ R = $($ $\frac{100\times 60}{100\times 6}$ $)$= 10% p.a.
Now, using the compound interest formula;
C.I = $[P\times ((1+\frac{r}{100}{)}^n-1)]$

∴ C.I = $[12,000\times ((1+\frac{10}{100}{)}^3-1)]$

= $₹(12,000\times \frac{331}{1,000})$

= ₹3,972