Question

There is 80% increase in an amount in 8 years at s.i what will be the



c.i on rs 14,000 after 3 years at the same rate?

Answer 1

Simple interest factor :

Principle × rate × time

Let the the principle amount be p.

The accumulated amount be 1.80p

Interest = 1.80p - p = 0.8p

0.8p = p × r × 8

8pr = 0.8p

r = 0.8/8

r = 0.1

0.1 × 100 = 10%

Compound interest accumulation factor :

(1 + 0.10)^3 × 14000 = 18634

18634 - 14000 = 4634

Compound interest = rs 4634