Question

An amount under simple interest becomes 7 times of itself in 18 years. The same rate of interest is applied on an amount of Rs. 54000 for three years under compound interest. Find the total sum obtained after 3 years?
1. Rs. 128,000
2. Rs. 116,000
3. Rs. 148,000
4. Rs. 138,000

Answer 1

Correct Answer - Option 1 : Rs. 128,000

Given:

A certain sum of money becomes 7 times of itself in 18 years if invested at the simple interest.

Formula used:

Amount = P[1 + (r/100)]^T

Calculation:

A sum of money becomes 7 times of itself in 18 years

Let the sum be x

The amount after 18 years will be 7x.

Interest = 7x – x = 6x

S I = (p × r × t)/100

6x = (x × r × 18)/100

r = 100/3%

If the rate of interest divided by 100 is applied on a sum of Rs. 54000 for three years under compound interest,

R = 100/3%

According to the question,

Amount = 54000 (1 + 1/3)³

⇒ 23000 × 4 × 4 × 4

⇒ Rs. 128000

∴ The amount after 4 years is Rs. 128,000