Question

Rohit invested some amount at the rate of 6 pcpa and at the end of 3 years he got Rs.8730
simple interest. How much compound interest he will get on same amount and same rate of
interest after 2 years?
a) Rs.5820 b) Rs.5949.60 c) Rs.5900
d) Rs.5994.60 e) None of these

Answer 1

The simple interest formulae :

Principle × rate × time = simple interest

P × 0.06 × 3 = 8730

0.18P = 8730

P = 8730/0.18

P = 48500

Compound interest accumulation formula :

P(1 + i)ⁿ = Accumulated amount.

Doing substitution :

48500(1.06)² = 54494.6

CI = 54494.6 - 48500 = 5994.6

Rs 5994.6