Question

Tick the correct answer in each of the following:

If the simple interest on a sum of money at $5\%$ per annum for 3 years is Rs 1200 then the compound interest on the same sum for the same period at the same rate will be

(a) Rs 1225 (b) Rs 1236 (c) R 1248 (d) Rs 1261

Answer 1

$\text{S.I = Rs. 1200}\text{Rate (R) =}5\%\text{Period (T) = 3 years}\therefore \text{Principal}=\frac{S.I.\times 100}{R\times T}=\frac{1200\times 100}{5\times 3}=Rs.8000\therefore \text{Amount on C.I =}8000{(1+\frac{5}{100})}^3=Rs.8000\times \frac{21}{20}\times \frac{21}{20}\times \frac{21}{20}=Rs.9261\therefore \text{C.I. = A - P = Rs. 9261 - 8000}=Rs.1261\left(d\right)$