Question

the simple interest on a sum of money for 3 years at 12 % per annum is rs. 6750. what will be the compound interest on the same sum at the same rate for the same period, compounded annually​

Answer 1

Given

• Simple interest (S.I.) = Rs.6750
• Time (t) = 3 years.
• Rate of interest (r) = 12%

To find

• Compound interest at the same rate for same period on same sum, compounded annually.

Solution

Now we have ;

• S.I. = Rs.6750
• t = 3 years
• r = 12%

We know that,

→ Simple interest (S.I.) = P * r * n

→ 6750 = P * 12% * 3

→ 6750 = P * (12/100) * 3

→ 6750 = P * (3/25) * 3

→ 6750 = 9P/25

→ 9P = 6750 * 25

→ 9P = 168750

→ P = 168750/9

→ P = Rs. 18750

Now as we know that,

→ C.I. = P(1 + r)ⁿ - P

→ C.I. = 18750(1 + 12%)³ - 18750

→ C.I. = 18750(1 + 3/25)³ - 18750

→ C.I. = 18750[(25 + 3)/25]³ - 18750

→ C.I. = 18750(28/25)³ - 18750

→ C.I. = 18750 * 1.404928 - 18750

→ C.I. = 26342.4 - 18750

→ C.I. = Rs.7592.4

Therefore, compound interest = Rs.7592.4

Answer 2

Step-by-step explanatio