Question

The compound interest on a certain sum for 2 years at 10% per annum, interest compounded yearly, is Rs. 6,300. What will be the compound interest on the same sum for \(3\dfrac{1}{4}\) years at the same rate? (nearest to one Rs.)
1. Rs. 10,892
2. Rs. 10,882
3. Rs. 10,829
4. Rs. 10,928

Answer 1

Correct Answer - Option 4 : Rs. 10,928

Given:

Compound interest = Rs. 6,300

Rate = 10%

Time = 2 years

Formula:

Let P = Principal, R = rate of interest and N = time period

Compound interest = P(1 + R/100)N - P

Calculation:

6300 = P{(1 + 10/100)2 - 1}

P = 6300/0.21

P = Rs. 30,000

Now, according to Question,

Compound interest = P{(1 + R/100)N - 1}

Compound interest = 30000(1 + 10/100)3\(\frac{1}{4}\) - 30000

Compound interest = 30000{(11/10)3 × (41/40)} - 30000

Compound interest = 30000{(1331/1000) × (41/40)} - 30000  

Compound interest = 30000{54571/40000} - 30000  

Compound interest = Rs. 10,928