Question

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

• A. ₹3972
• B. ₹5972
• C. ₹4972
• D. ₹2972

Answer 1

The correct option is A

₹3972

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 = $[12000\times ((1+\frac{10}{100}{)}^3-1)]$

= $₹(12000\times \frac{331}{1000})$

= ₹3972