If the simple interest on a sum of money at 5% per annum for 3 years is Rs. 1200, find the compound interest on the same sum for the same period at the same rate.

Q: If the simple interest on a sum of money at 5% per annum for 3 years is Rs. 1200, find the compound interest on the same sum for the same period at the same rate.

Clearly, Rate = 5% p.a ., Time = 3 years S.I =Rs.1200. So,Principal =Rs.(100 x 1200/3x5) =Rs.8000. Amount =Rs.[8000 x (1+5/100)³] =Rs(8000x21/20x21/20x21/20) = Rs.9261 C.I =Rs.(9261-8000) =Rs.1261.

Rs.1251
Rs.1261
Rs.1271
Rs,1281

Correct Answer: Rs.1261

Explanation:

Clearly, Rate = 5% p.a .,

Time = 3 years

S.I =Rs.1200.

So,Principal

=Rs.(100 x 1200/3x5)

=Rs.8000.

Amount

=Rs.[8000 x (1+5/100)³]

=Rs(8000x21/20x21/20x21/20)

= Rs.9261

C.I

=Rs.(9261-8000)

=Rs.1261.

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