Question

There is 60% increase in an amount is 6 years at simple interest. What will be the compound interest of Rs. 12,000 after 3 years at the same rate ?
1. Rs. 3575
2. Rs. 3950
3. Rs. 3972
4. Rs. 3980

Answer 1

Correct Answer - Option 3 : Rs. 3972

Given 

Increase in salary after 6 years = 60% 

Formula Used 

A = P(1 + r/100)^t

simple Interest = (principal × rate × time)/100

Calculation 

Let the salary at 1st year be 100x 

Increased in salary = 60% of 100x = 60x 

⇒ 60x = (100x × 6 × R)/100  

⇒ R = 10% 

Compound Interest after 3 years = P(1 + r/100)^t - P

⇒ 12000(1 + 10/100)³ - 12000

⇒ 12000 × (11/10)³ - 12000

⇒ 15972 - 12000 = Rs. 3972

∴ The required answer is Rs 3972