Multiple choice

If a certain amount increases by 60% in 6 years at simple interest, then what will be the compound interest on Rs. 25,000 after 3 years at the same rate?

  1. Rs. 7,325

  2. Rs. 7,850

  3. Rs. 8,275

  4. Rs. 8,460

  5. Rs. 8,825
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Simple interest: 0.6P = P * r * 6, so r = 0.1 = 10%. Compound interest on 25000 at 10% for 3 years: A = 25000 * (1.1)^3 = 25000 * 1.331 = 33275. CI = 33275 - 25000 = 8275.

AI explanation

If the amount increases by 60% in 6 years at simple interest, the simple interest earned is 60% of the principal, meaning the interest for one year is 10% and the rate is 10% per annum. Using the compound interest formula, the amount after 3 years on Rs. 25,000 is 25000 multiplied by 1.1 cubed, which gives Rs. 33,275. The compound interest earned is the final amount minus the principal, so Rs. 33,275 minus Rs. 25,000 equals Rs. 8,275.

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