Question

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?

Accepted Answer

A. $	ext{SI} = \frac{P 	imes R 	imes T}{100} \Rightarrow 6500 = \frac{P 	imes 13 	imes 8}{100} \Rightarrow P = 6250$. Amount under compound interest for 2 years at 8%: $$A = 6250 \left(1 + \frac{8}{100}ight)^2 = 6250 	imes \frac{108}{100} 	imes \frac{108}{100} = 7290$$ $$	ext{CI} = A - P = 7290 - 6250 = 	ext{₹ } 1040$$

Simple and Compound Interest Calculation

Explanation

Practise this under exam conditions