Question

sang at the beginning of the third
year.
Simple interest on a sum of money for three years at 5% per annum is 1.200. Compute the
compound interest at the same rate for the same time period when the interest is reckoned annually​

Answer 1

Answer:

Simple interest,I,is given by the formula,

I=PNR

Where P is the principal, N , the number of years and R , the rate of interest.

Here,I=1200÷3 =Rs. 400

N =3; and R =5%;

P = I÷NR = 400÷5/100 =400× 100/5 =Rs.8000

Principal+ compound interest for three years

=8000×(105/100)(105/100)(105/100)

=Rs. 9261

Compound interest for the same amount for the same period =Rs. (9261 - 8000)

=Rs. 1261

Step-by-step explanation:

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