If the simple interest on a sum of money at 5% per annum for 3 years i

1.	If the simple interest on a sum of money at 5% per annum for 3 years is Rs. 1200 then the compound interest on the same sum for the same period at the same rate will be A. Rs. 1225 B. Rs. 1236 C. Rs. 1248 D. Rs. 1261
Answer» Interest rate, R = 5% per annum Time = 3 years Simple interest = Rs.1200 Simple interest = PRT/100 ⇒ 1200 = (P × 5 × 3)/100 ⇒ 1200 = P × 15/100 ⇒ P = 1200 × 100/15 ⇒ P = 8000 Now, Amount (A) = P (1 + R/100)ⁿ = 8000 (1 + 5/100)³ = 8000 (1 + 1/20)³ = 8000 (21/20)³ = 8000 × 9261/8000 = 9261 ∴ Amount = 9261 ∴ Compound interest = Rs.(9261 – 8000) [∵CI = A – P] = Rs.1261

If the simple interest on a sum of money at 5% per annum for 3 years is Rs. 1200 then the compound interest on the same sum for the same period at the same rate will be A. Rs. 1225 B. Rs. 1236 C. Rs. 1248 D. Rs. 1261

Answer»

Interest rate, R = 5% per annum

Time = 3 years

Simple interest = Rs.1200

Simple interest = PRT/100

⇒ 1200 = (P × 5 × 3)/100

⇒ 1200 = P × 15/100

⇒ P = 1200 × 100/15

⇒ P = 8000

Now,

Amount (A) = P (1 + R/100)ⁿ = 8000 (1 + 5/100)³

= 8000 (1 + 1/20)³

= 8000 (21/20)³

= 8000 × 9261/8000

= 9261

∴ Amount = 9261

∴ Compound interest = Rs.(9261 – 8000) [∵CI = A – P]

= Rs.1261