Multiple choice

The simple interest accrued on an amount of Rs. 40,000 at the end of three years is Rs. 12,000. What would be the compound interest accrued on the same amount at the same rate in the same period?

  1. Rs.13000

  2. Rs.13310

  3. Rs.13240

  4. Rs.12860

  5. Rs.12920
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

SI = 12000 on Rs. 40000 for 3 years. Rate = (12000 × 100)/(40000 × 3) = 10% p.a. CI = P(1 + r/100)^n - P = 40000(1.1)^3 - 40000 = 40000(1.331) - 40000 = 53240 - 40000 = Rs. 13240. Option C matches.

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