A sum of Rs. 12,000 amounts to Rs. 20,736 in 3 years at a certain rate percent per annum, interest compounded annually. What will amount of the same sum to in 2 years at the same rate on compound interest?
Show answer & explanation
Correct answer: A
Explanation
Correct Answer is option 1 i.e. Rs. 17280
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Concept |
Understanding |
Application |
Fair calculation |
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For CI: A = P[1 + r/100]t |
Given A = 20736, P = 12000 t = 3 we can get rate of interest with this data |
20736 = 12000[1 + r/100]3 [1 + r/100]3 = 1728/1000 1 + r/100 = 12/10 r = 20% Now for 2 years: A = 12000[1 + 20/100]2 ⇒ 12000 × 36/25 ⇒ 17280 |
20736/12000 Divide both by 12: = 1728/1000 12000 × 36/25 = 480 × 36 = 17280 |