Question
There is 40% increase in an amount in 8 years at simple
interest. What will be the compound interest of Rs. 16,000 after 3 years at the same rate?Solution
Let P = Rs. 100. Then, SI = Rs. 40 and T = 8 years. => R = (100 × 40)/(100 × 8) = 5% Now, P = Rs. 16000,T = 3 years and R = 5% p.a. CI = Rs. [16000 × {(1 + 5/100)3 – 1}] CI = [16000 × {105/100)3 – 1}] CI = [16000 × 1261/8000] CI = Rs.2522
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