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Simple and Compound Interest Calculation

CMAT 2023 · Quantitative Techniques & Data Interpretation · Medium · Simple Interest

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The simple interest accrued on a sum of certain principal in 8 years at the rate of 13% per year is ₹ 6500. What would be the compound interest accrued on that principal at the rate of 8% per year in 2 years?

  1. A.

    ₹ 1040

  2. B.

    ₹ 1020

  3. C.

    ₹ 1060

  4. D.

    ₹ 1200

Answer

A

Explanation

SI=P×R×T100⇒6500=P×13×8100⇒P=6250\text{SI} = \frac{P \times R \times T}{100} \Rightarrow 6500 = \frac{P \times 13 \times 8}{100} \Rightarrow P = 6250.

Amount under compound interest for 2 years at 8%: A=6250(1+8100)2=6250×108100×108100=7290A = 6250 \left(1 + \frac{8}{100}\right)^2 = 6250 \times \frac{108}{100} \times \frac{108}{100} = 7290

CI=A−P=7290−6250=₹ 1040\text{CI} = A - P = 7290 - 6250 = \text{₹ } 1040

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