Question

The simple interst on a sum of money for 3 years at 12%p.a is rs 6750. What will be the compound interst on the same sum at the rate and for the same period compounded annually?

Answer 1

Answer:

Rs 7592.4

Step-by-step explanation:

We have Principal = Rs x

Time period = 3 yrs

Rate of Interest = 12% p.a.

We know that Simple interest = $\frac{PRT}{100}$ = 6750

⇒ $\frac{x * 3 * 12}{100}$ = 6750

⇒ $\frac{x * 3 * 3}{25}$ = 6750

⇒ x = $\frac{6750 * 25}{9}$

⇒ x = 750 × 25

⇒ x = 18750

Hence our Principal is Rs 18750

To find Compound Interest,

$P[( 1 + \frac{R}{100})^{n} - 1]$

= $18750[( 1 + \frac{12}{100})^{3} - 1]$

= $18750[\frac{1404928}{1000000}- 1]$

= $\frac{404928}{1000000}$ × 18750

= 2530.8 × 3

= Rs 7592.4

Hence Compound Interest here = Rs 7592.4

THANKS!