An amount increases by 60% in 6 years at simple interest. What is the compound interest on Rs. 12,000 for 3 years at the same annual rate?

Problem restatementFirst extract the annual simple-interest rate from a 60% increase over 6 years, then apply that rate for 3 years with annual compounding on Rs. 12,000.

Given data

• SI increase over 6 years = 60% ⇒ r × 6 = 0.60 ⇒ r = 0.10 = 10% p.a.
• Principal for CI = Rs. 12,000; time = 3 years

Concept/ApproachUse SI to find r, then compute CI via the amount factor (1 + r)^t.

Step-by-step calculationA = 12,000 × (1.10)³ = 12,000 × 1.331 = 15,972CI = A − P = 15,972 − 12,000 = Rs. 3,972

Verification/AlternativeYear-wise interest: 1200; then 1320; then 1452 → total 3972.

Common pitfallsConfusing SI and CI; using 60% over 3 years (it was over 6 years).

Final AnswerRs. 3,972