Multiple choice

The difference between the compound interest and simple interest for two years is Rs. 892.8 at the rate of 12% per annum. If the same principle is invested at the rate of 10% per annum on compound interest for 3 years, then what is the compound interest in this case?

  1. Rs. 23,044

  2. Rs. 20,245

  3. Rs. 20,453

  4. Rs. 20,522

  5. Rs. 20,455
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

For 2 years, CI-SI = P * (r/100)^2. 892.8 = P * (12/100)^2. 892.8 = P * 0.0144. P = 892.8 / 0.0144 = 62000. CI for 3 years at 10% = P * ((1+0.1)^3 - 1) = 62000 * (1.331 - 1) = 62000 * 0.331 = 20522.

AI explanation

The difference between compound interest and simple interest for two years is given by the formula D = P * R^2 / 10000, so 892.8 = P * 12^2 / 10000. Solving this gives P = 62000; using the compound interest formula for 3 years at 10%, the amount becomes 62000 * (1.1)^3 = 82522. The compound interest is the amount minus the principal, which is 82522 - 62000 = Rs. 20,522.

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