Multiple choice

A sum of money becomes (\frac{2}{5}) times more in 4 years at simple interest. What will be the compound interest of Rs 6000 after 3 years at the same rate?

  1. Rs 1756

  2. Rs. 1986

  3. Rs. 1648

  4. Rs. 1872

Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Principal becomes (1 + 2/5) = 7/5 in 4 years at SI. Rate = (7/5 - 1)/4 × 100 = 10% p.a. For CI on 6000 for 3 years at 10%: Amount = 6000(1.1)³ = 6000 × 1.331 = 7986. CI = 7986 - 6000 = 1986. Option A (1756) uses wrong rate, Option C (1648) underestimates.