The simple interest on a certain sum of money for two years at 5\% is ₹1,600 . Find the compound interest at the same rate after 3 years, interest com - Quantitative Aptitude MCQ Competitive Exam Practice Paper 2026 | ExamTest.live

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The simple interest on a certain sum of money for two years at 5% is ₹1, 600 . Find the compound interest at the same rate after 3 years, interest compounded annually.

Solution & Step-by-step Explanation

**Step 1: Find the principal amount (P)** Given, Simple Interest (SI) = ₹1, 600, Time (T) = 2 years, Rate (R) = 5% SI = \frac{P \times R \times T}{100} 1, 600 = \frac{P \times 5 \times 2}{100} 1, 600 = \frac{10 P}{100} 1, 600 = \frac{P}{10} P = 1, 600 \times 10 = ₹16, 000 **Step 2: Find the compound interest (CI) for 3 years** Formula for Compound Interest: CI = P [(1 + \frac{R}{100})^{T} - 1] Here, P = 16, 000, R = 5%, T = 3 years CI = 16, 000 [(1 + \frac{5}{100})^{3} - 1] CI = 16, 000 [(1 + \frac{1}{20})^{3} - 1] CI = 16, 000 [(\frac{21}{20})^{3} - 1] CI = 16, 000 [\frac{9261}{8000} - 1] CI = 16, 000 [\frac{9261 - 8000}{8000}] CI = 16, 000 \times \frac{1261}{8000} CI = 2 \times 1261 = ₹2, 522

Try it yourself before checking the explanation above.

The simple interest on a certain sum of money for two years at 5% is ₹1, 600 . Find the compound interest at the same rate after 3 years, interest compounded annually.

₹2, 555

₹2, 355

₹2, 520

₹2, 522

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