Multiple choice

In 5 years, the interest earned was 40% of the principal at a certain simple interest rate. What will be the compound interest earned (in ₹) on ₹24,000 in 3 years at the same rate?

  1. 6333

  2. 5233

  3. 6233

  4. 5333
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C Correct answer
Explanation

Simple interest = (P*R*T)/100. Given 40% of P in 5 years, R = 40/5 = 8% per annum. Compound interest on 24000 at 8% for 3 years is 24000 * ((1.08)^3 - 1) = 24000 * (1.259712 - 1) = 24000 * 0.259712 = 6233.088.

AI explanation

Let the simple interest rate be R; since the interest of 40% over 5 years yields 8% per year, R is 8. Using the compound interest formula for 3 years, Compound Interest = Principal x ((1 + R/100)^T - 1), we substitute the values to get 24000 x ((1 + 8/100)^3 - 1). This simplifies to 24000 x ((1.08)^3 - 1) = 24000 x (1.259712 - 1) = 24000 x 0.259712 = 6233.08. The result is 6233.

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