If compound interest received on a certain amount in the 3rd year is Rs. 12,100, what will be the compound interest (in Rs) for the 4th year on the same amount if rate of interest is 9%?
Show answer & explanation
Correct answer: C
Explanation
The correct answer is option 3 i.e. 13189
Let the principal be = Rs 100
Amount after 3 years = 100(1 + 9/100)3 = 100(1.09)3 = 129.5 .....(1)
Amount after 2 years = 100(1.09)2 = 118.8 .....(2)
Interest for 3rd year = (1) - (2) = 129.5 - 118.8 = 10.70
3rd year interest for princpal amount 100 = 10.7
So, for 12100 interest
Principal = 12100 × 100/10.7 = 113159.2
Now, we calculate amount after 3 years and 4 years
A = 113159(1 + 9/100)3 = 113159 × (1.09)3
Amount after 4 years
A = 113159(1.09)4
Difference
= 113159[(1.09)4 = (1.09)3] = 13189 approx