There is 40% increase in an amount in 5 years at simple interest. What will be the compound interest of Rs. 25000 after 3 years at the same rate?
- ARs 6492.8
- BRs 12985.6
- CRs 16232
- DRs 9739.2
Solution & Step-by-step Explanation
Let the principal be P. The increase in amount is the simple interest (SI), which is 40% of P.
SI=
100
P×R×T
0.40P=
100
P×R×5
R=
5
40
=8% per annum
Now, we need to find the compound interest (CI) on Rs. 25000 for 3 years at 8% per annum.
Amount (A)=P(1+
100
R
)
T
A=25000(1+
100
8
)
3
A=25000(
25
27
)
3
A=25000×
15625
19683
=31492.8
CI=A−P=31492.8−25000=Rs. 6492.8
SI=
100
P×R×T
0.40P=
100
P×R×5
R=
5
40
=8% per annum
Now, we need to find the compound interest (CI) on Rs. 25000 for 3 years at 8% per annum.
Amount (A)=P(1+
100
R
)
T
A=25000(1+
100
8
)
3
A=25000(
25
27
)
3
A=25000×
15625
19683
=31492.8
CI=A−P=31492.8−25000=Rs. 6492.8