Multiple choice

For a sum of Rs. 100, the simple interest becomes 70% of the sum at a certain rate after 7 years. What will be the compound interest on Rs. 12,000 after 3 years at the same rate?

  1. Rs. 3,560

  2. Rs. 3,960

  3. Rs. 3,900

  4. Rs. 3,972

  5. Rs. 4,000
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

SI = 70% of 100 = 70. 70 = 100 * r * 7 / 100, so r = 10%. CI on 12,000 for 3 years at 10% = 12,000 * (1.1^3 - 1) = 12,000 * (1.331 - 1) = 12,000 * 0.331 = 3,972.

AI explanation

For Rs. 100, the simple interest is 70% of the sum, which is Rs. 70 over 7 years, meaning the annual interest is Rs. 10 and the rate is 10%. Using the compound interest formula for Rs. 12000 at 10% over 3 years, the interest is 12000 multiplied by 1 plus 0.1 cubed minus 12000. This evaluates to 12000 multiplied by 0.331, resulting in a compound interest of Rs. 3972.

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